NOTE: The Greeks represent the consensus of the marketplace as to how the option will react to changes in certain variables associated with the pricing of an option contract. And as Plato would certainly tell you, in the real world things tend not to work quite as perfectly as delta gamma theta put option 61 an ideal one. Delta. Delta, Vega and Theta generally get most of the attention, but Gamma has important opfion for risk in options strategies that can easily be demonstrated.

Buyers, by definition, have only limited risk in their optiion together with the potential for unlimited gains. While this might look good oOverview of Option GreeksOption greeks measure the options sensitivity to various risk components inherent to the price of an option. These measure include the speed of the underlying securities price movement, interest rate movement, time decay of an option, and volatility.Delta and Gamma measure the theeta sensitivity to the speed of price changes in the underlying security, Rho measures the options interest rate sensitivity, Theta measures the change in the options price due to a change in the time puut till expiration on the option, and Vega measures the change in the options price due to changes in the options historical volatility.

Delta BasicsDelta measures the rate of change in the option price over the rate of change in the price of the thea security.