Option Greeks are essential for understanding how and why an option’s price moves. They are like the diagnostics of an option, telling you its sensitivity to various factors. There are five primary Greeks: Delta, Gamma, Theta, Vega, Rho. Don’t be intimidated by the Greek letters – we’ll break each down in simple terms with examples, focusing on intuition more than math.
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6. Understanding Option Greeks
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Option Greeks are essential for understanding how and why an option’s price moves. They are like the diagnostics of an option, telling you its sensitivity to various factors. There are five primary Greeks: Delta, Gamma, Theta, Vega, Rho. Don’t be intimidated by the Greek letters – we’ll break each down in simple terms with examples, focusing on intuition more than math.