Part 7 Trading Master Class

Option Greeks: Measuring Sensitivity

Professional traders use “Greeks” to assess how option prices change with market variables:

Delta (Δ): Measures the rate of change in option price relative to the underlying asset’s price.

Gamma (Γ): Measures how Delta changes with price movement.

Theta (Θ): Represents time decay – how much value an option loses daily as expiry nears.

Vega (ν): Sensitivity to volatility changes.

Rho (ρ): Sensitivity to interest rate changes.

Understanding Greeks helps traders manage portfolio risks and design advanced strategies.