Options are financial derivatives that gives the buyer of the option the right to buy or to sell the underlying asset at a stated price on or before a specified date.
What are Option Greeks
Option Greeks are a set of calculations that measures the impact on option price due to various factors like value of underlying asset, volatility, interest rates and time to maturity.
Let Us Check Out The 6 Option Greeks
DELTA
Delta (Δ) is a measure of the sensitivity of an option’s price changes relative to the changes in the underlying asset’s price.
GAMMA
Gamma (Γ) is a measure of the delta’s change relative to the changes in the price of the underlying asset.
VEGA
Vega (ν) is an option Greek that measures the sensitivity of an option price relative to the volatility of the underlying asset.
THETA
Theta (θ) is a measure of the sensitivity of the option price relative to the option’s time to maturity.
RHO
Rho (ρ) measures the sensitivity of the option price relative to interest rates.If a benchmark interest rate increases by 0.5%, the option price will change by the rho amount.
DELTA
Delta (Δ) is a measure of the sensitivity of an option’s price changes relative to the changes in the underlying asset’s price.