How Does the “Greeks” Concept in Options Trading Help a Trader Manage Risk?
The Greeks are a set of sensitivity measures used to quantify the risk of an options portfolio to small changes in market factors. Delta measures sensitivity to the underlying price, Gamma measures Delta's sensitivity, Theta measures time decay, and Vega measures sensitivity to implied volatility.
Traders use the Greeks to understand and manage the risk exposures of their options positions.
Glossar
Options Trading Help
Volatility ⎊ Options trading help within cryptocurrency necessitates a nuanced understanding of implied volatility surfaces, differing significantly from traditional equity markets due to the nascent nature of the asset class and frequent structural shifts.
Sensitivity Measures
Measures ⎊ Sensitivity Measures, often referred to as the Greeks in options theory, quantify the rate of change in an option's price relative to changes in underlying parameters like asset price, volatility, time to expiration, or interest rates.
Time to Expiration
Decay ⎊ Time to Expiration, within cryptocurrency options and financial derivatives, represents the remaining lifespan of a contract before its termination and potential exercise or assignment.