How Does the "Greeks" Concept in Options Trading Help a Trader Manage Risk? ▴ Learn

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.

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