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Options Greeks

Advanced Articles

The Options Greeks
3 year(s) ago
16 minutes Read
The Greeks – Delta
3 year(s) ago
11 minutes Read
The Greeks – Gamma
3 year(s) ago
16 minutes Read
The Greeks – Vega
3 year(s) ago
5 minutes Read
The Greeks – Theta
3 year(s) ago
20 minutes Read

What are the Options Greeks?

Option Greeks essentially are measures of various sensitivities of an option’s price. They measure different factors that will affect the price of an option and will help you understand what is going on at a deeper level.

It is important to understand what the Greeks are, with this data you can make more informed decisions on trades and positions alike. At this stage, we will concentrate on understanding the big 5 which option traders collectively refer to as the Greeks – Delta, Gamma, Theta, Vega and Rho.

An Overview of the Greeks

An overview and symbols of the Greeks in options trading.

How can Options Greeks help me?

Compare using Greeks in your options trading to a pilot looking to plan a flight. They will prepare by looking at weather, wind speeds, altitude and cloud cover to name a few before making any decisions on a flight path. Like this, the Greeks can help you make more informed decisions about which options to trade and when to trade them, better understanding the risks and potential rewards. 

Please note that Greeks are theoretical and are based on mathematical models, and therefore they should be considered accordingly.

 

Important information: Derivative products are considerably higher risk and more complex than more conventional investments, come with a high risk of losing money rapidly due to leverage and are not, therefore, suitable for everyone. Our website offers information about trading in derivative products, but not personal advice. If you’re not sure whether trading in derivative products is right for you, you should contact an independent financial adviser. For more information, please read our Important Derivative Product Trading Notes.

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