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Part 11 Trading Master Class With Experts

13
Option Greeks (Foundation of Option Trading)

Option Greeks control how premiums move. Every trader must understand them.

Delta

Measures directional movement.

CE delta: positive (0 to 1)

PE delta: negative (0 to -1)

Theta

Time decay.
Premium decreases as expiry approaches.
Big threat for option buyers; advantage for sellers.

Vega

Impact of volatility.
High volatility = high premium.

Gamma

Rate of change of delta.
Explains how fast an option becomes reactive to price.

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