If you’ve ever looked at an options chain and wondered why two contracts with the same expiration date have different prices, the answer often lies in the Greeks.
The Greeks are not just theoretical math—they measure how your option reacts to time, price, volatility, and more. Whether you're buying or selling, understanding these numbers can make the difference between guessing and trading with intent.
Here are the four most important Greeks to know:
Delta
Delta measures how much the option’s price will move when the stock moves $1. A delta of 0.50 means the option should move 50 cents for every dollar the stock moves. It also gives you a rough idea of probability—how likely the option is to finish in the money.
Theta
Theta tracks time decay. It tells you how much value the option loses each day, all else being equal. For buyers, theta works against you. For sellers, it works in your favor.
Vega
Vega measures how sensitive the option is to changes in volatility. If implied volatility rises, option premiums typically rise too. When volatility drops, they lose value.
Gamma
Gamma shows how fast delta is changing. It’s most important for traders managing positions near expiration or close to the strike price. High gamma means quick moves in delta—and that means more speed, more risk, and more opportunity.
Why does this all matter? Because pricing, movement, and risk aren't random. They're calculated. And once you start using the Greeks to plan and manage your trades, you stop reacting—and start anticipating.
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Here’s what you’ll get:
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