How Does the Concept of "Greeks" Relate to the Black-Scholes Model? ▴ Learn

How Does the Concept of “Greeks” Relate to the Black-Scholes Model?

The "Greeks" are a set of risk parameters derived as partial derivatives of the option pricing model, such as Black-Scholes. They measure the sensitivity of an option's price to small changes in the model's inputs.

For example, Delta measures sensitivity to the underlying price, and Vega measures sensitivity to volatility. Traders use the Greeks to manage the risk of their options portfolio.

How Does the “Vega” of an Option Measure Its Sensitivity to Volatility Changes?

How Does the ‘Vega’ of an Option Measure Its Sensitivity to Implied Volatility?

What Is the Significance of the Black-Scholes Model in Calculating the Greeks?

How Do Traders Use Volatility (The “greeks” Vega) to Manage Their Options Positions?