How Does the "Greeks" (E.g. Theta, Vega) Measure Options Risk? ▴ Learn

How Does the “Greeks” (E.g. Theta, Vega) Measure Options Risk?

The Greeks are a set of risk measures that quantify the sensitivity of an option's price to changes in various factors. Theta measures the rate of time decay (loss of value as expiration nears).

Vega measures the sensitivity to changes in implied volatility. They are essential for traders to manage the multi-faceted risks inherent in options portfolios.

What Are the ‘Greeks’ in Options Trading and Which One Measures Time Decay?

How Is Vega Used to Manage Volatility Exposure in an Options Portfolio?

How Does the “Greeks” Measure Vega Quantify Volatility Risk for a Market Maker?

How Does the ‘Greeks’ Help a Market Maker Manage Inventory Risk?