What are Option Greeks
If you’re the pilot of an aircraft, the Option Greeks are your instrument panel. If you don’t manage your instrument panel properly, well…you get the picture. Understanding what Option Greeks are is absolutely critical to every Option position. We break this course into easy to understand chapters for all the four Option Greeks – Delta, the king of all Option Greeks. Gamma – the silent operator. Theta – every Option seller’s dream. And Vega – Watch out for this one.. Most beginners to Options tend to ignore the Greeks. Master what Option Greeks are, and you’ll shave off months of learning curve. Not to mention, you can then fly your aircraft on “auto-pilot" (with help from the Option Greeks).
Learn about all 4 Option Greeks
What are Option Greeks and why do they matter. There are 4 Option Greeks – Delta, Gamma, Theta and Vega. Each Option Greek quantifies one parameter that goes into the Options pricing formula. Understanding what Option Greeks are is critical for all Options traders.
Greeks represents the math formulas in Options
There are three main parameters for pricing Options in the Black Scholes formula. They are Price movement, Time to expiry and the Volatility of the stock. What Option Greeks are is they are methods to quantify how much an Option price will change for changes in these parameters.
Why Option Greeks are the most important theory in Options
Options are mathematical inventions, so understanding what the Option Greeks quantify may seem theoretical, but understanding this theory is key to understanding the importance of what Option Greeks are
Greeks are opposite for Buyers and Sellers of Options
It is important to understand what the Options Greeks are whether you are a Buyer of Options or a Seller of Options. Option Greeks affect Buyers and Sellers differently, and they are the opposite for Buyers and Sellers.
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