A Beginner’s Guide to Understanding Option Greeks
agadmin2023-07-23T11:30:22+00:00Options trading can be an exciting and potentially lucrative endeavor, but it also comes with its fair share of complexities. One aspect that traders need to grasp is the concept of "Option Greeks." These Greek letters represent various factors that affect the pricing and behavior of options. In this beginner's guide, we will demystify Option Greeks and provide you with a solid foundation to navigate the world of options trading. What are Option Greeks? Delta: Delta measures how much an option's price changes in relation to the underlying asset's price. A delta of 0.5 means that for every ₹1 change in the underlying asset, the option's price will change by ₹0.50. Gamma: Gamma measures the rate at which an option's delta changes. It helps traders understand how delta will respond to future price movements. Theta: Theta captures the time decay of an option. As time passes, the option loses value,