What Is the Concept of 'Greeks' in Options Trading? ▴ Learn

What Is the Concept of ‘Greeks’ in Options Trading?

The Greeks are a set of risk measures that quantify the sensitivity of an option's price (premium) to changes in various underlying factors. Delta measures sensitivity to the underlying asset's price, Gamma measures the rate of change of Delta, Theta measures sensitivity to time decay, Vega measures sensitivity to volatility, and Rho measures sensitivity to interest rates.

Traders use the Greeks to manage and hedge the complex risks in their options portfolios.

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