A way of understanding the risk exposures related to an option or a book of options. Options traders will refer to the delta, gamma, vega, and theta of their option positions, referring to measurements of the sensitivity of an option’s price relative to quantifiable factors. In essence, they assist the trader in understanding the risk and reward potential for an option position. For example, the theta tells a trader how the price will change as time passes, while the delta provides a measurement of the sensitivity of an option’s premium to a change in the price of the underlying asset.
“Greeks”
Market Terms
We don't know everything about the markets. We're just devoted to learning. Taken from those smarter than ourselves, here's how we define “Greeks”.