asked
Save over 60% on Brokerage
We can help you save between 60% to 90% brokerage fee & taxes. Contact us today...
Option Greeks are used to measure an option’s sensitivity to the changes in the price of underlying stock, market volatility and time to expiration. In the trading market, the spot price of an option, volatility and time to expiration are all simultaneously changing. The options greeks help traders understand the impact of the change in these factors on his position.
There are five Option Greeks:
Each of these Options greeks helps you measure the sensitivity of the option to change in spot price, volatility and time to expiration.
Option Greeks |
What it does? |
Delta |
It helps a trader understand how much the premium of an Option will change for a corresponding change in the price of its underlying. Suppose SBI stock moves up from ₹ 250 to ₹ 270. Delta will tell you the increased premium value of its Option. |
Gamma |
It measures the rate of change of delta for change in the value of the underlying instrument. In other words, delta measures the change in the price of premium whereas Gamma measures the speed of change in delta. |
Theta |
It measures the effect of loss of time on the pricing of Options. It helps a trader understand how much his Option losses value with each passing day. |
Vega |
It tells you by how much the price of Option will change with a change in the volatility. |
Rho |
It measures the change in Option price for every percentage change in the interest rates. |
No comments found. Be the first to post a comment.
List of all questions Ask your question
List of all questions Ask your question
Best of
Top Stock Brokers in India Top 10 Discount Brokers Top 10 Full-Service Brokers Lifetime Free Demat Account Best Broker for Beginners More Reports...Reviews (Discount Broker)
Zerodha (₹20/trade) Edelweiss (₹10/trade) Upstox (₹20/trade) 5paisa (₹20/trade) ProStocks (₹899 Unlimited) More Brokers...Reviews (Full-service)
ICICI Direct Motilal Oswal HDFC Sec Sharekhan IIFL Securities More Brokers...Compare Brokers
Broker Articles / Tutorials Compare Share Brokers Side-by-Side Comparison Broker Complaints Monitor Broker Glossary Special OffersTrading Platform Reviews
Zerodha Kite Review Sharekhan TradeTiger Omnesys NEST Review ODIN Review NSE NOW Review More Reviews...Options Basics
Options Overview Benefits & Risks of Options Options Pricing More Articles... Options Trading FAQs Options Trading GlossaryBroker Reviews
Zerodha Review 5paisa Review ProStocks Review Sharekhan Review Angel Broking Review ICICI DirectOptions Trading Platform
Kite Zerodha Trade Tiger Sharekhan Omnisys NEST Upstox RKSV Fyers One Fyers ScalperT FinvasiaHistory of Chittorgarh
History of Chittorgarh Maharana Pratap Meera Bai Panna Dhai Rani Padmini Jainism & Chittor (Hindi)Chittorgarh City Info
Chittorgarh City Map Hotels / Resorts Sainik School Chittorgarh Cement Industry Hindustan Zinc
Comments