What are Options Greeks?
Options Greeks are characters derived using strict mathematical formulae for understanding/predicting price changes of individual or group of options. They are know as Greeks because they are represented in Greek letters, Delta (δ), Gamma (γ), Vega, Theta (θ) and Rho (P). Each option Greek uses different formula and provides different information.
This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.
- Delta – measures the change in option price with the increase or decrease of every dollar in the underlying product price.
- Gamma – measures the rate of change of the delta value with each increase or decrease of every dollar in the underlying product price.
- Theta – measures the change in option price with the passing of each day. The value increases with days for at-the-money options and decreases with days for out-of-the money option.
- Vega – measures the change in option price with the increase or decrease of volatility of the underlying asset. The value is often greater for at-the-money options than out-of-the-money options.
- Rho – measures the change in options price with the increase or decrease in the risk free interest rate.
This information is provided by NobleTrading.com, a worldwide brokerage firm, offering direct access services for online stocks trading, options trading, futures trading, commodities trading and forex trading on a variety of trading software platform.
posted by NobleTrading at
2:18 AM
<< Home