Option Greeks Explained

option greeks explained

Delta = A measure of how sensitive an options price is, to changes in the underlying. More specifically it tells us how much an options price changes, when the underlying price changes by $1.

Gamma = Tells us how much Delta changes given a $1 change in the underlying’s price.

Theta = It is time decay. It is what eats at the value of your options as each day goes by.

Vega = How much your options premium or the value of your option is going to change based on a 1% move in implied volatility.

Rho = How much your options value changes given a plus or minus 1% change in the treasury bills risk free rate.

Option Greeks Explained Conclusion

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Letting Option Greeks Explained readers know that they should assess risk through the greeks.
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