Option Greeks
5 Tools to Measure Risk
1
Delta
2
Gamma
3
Theta
4
Vega
5
Rho
A Vital Financial Metric
Options and derivatives are complex instruments. Trading derivatives requires a deep understanding of the basics as well as the various metrics that influence their pricing and behaviour. Among these factors, the 'Greeks' play a significant role in helping traders make informed decisions.
The Option Greeks are a set of mathematical measures that describe the sensitivity of an option's price to multiple factors. Investors and even traders use options for hedging and speculation. Options trading can be a powerful tool for investors who want to manage risk and maximise their returns.
In this FREE eBook, you will learn all about option Greeks and how vital they are for traders to gauge changes in the premium and make the right moves at the right time.
Topics Covered
1. What are Option Greeks?
2. Value of Money
3. Delta
- 3.1. Formula
- 3.2. Delta for Call Options
- 3.3. Delta for Put Options
- 3.4. Delta and Strike Prices
4. Gamma
- 4.1. Formula
- 4.2. Gamma and Strike Prices
5. Theta
- 5.1. Formula
- 5.2. Theta for ITM Call Options
- 5.3. Theta for OTM Call Options
- 5.4. Theta for ITM Put Options
- 5.5. Theta for OTM Put Options
- 5.6. Theta and Strike Prices
6. Vega
- 6.1. Implied Volatility
- 6.2. Formula
- 6.3. Vega for Long Positions
- 6.4. Vega for Short Positions
- 6.5. Vega and Strike Prices
7. Rho
- 7.1. Formula
- 7.2. Rho for Call Options
- 7.3. Rho for Put Options
- 7.4. Rho and Strike Prices