Lesson

Meet the Five Greeks | Options Educator

Introduction to Delta, Gamma, Theta, Vega, and Rho — the five forces that move option prices.

What you'll practice

• Move the call's strike toward the stock price until its delta is about 0.500, within 0.030.
• After "Stock up 1 standard move", which way does the call's delta go?

In this lesson

Why Traders Use Greeks

• Greeks measure how premium reacts to different inputs
• Delta = direction, Theta = time, Vega = volatility
• Two options with the same price can behave very differently

Direction Greeks — Delta & Gamma

• Delta ≈ probability of finishing ITM
• Gamma = speed of delta change (peaks ATM near expiry)
• Long option = long gamma = benefits from moves

Time & Volatility Greeks — Theta & Vega

• Theta takes a little value every day you hold
• Vega = $ move per 1 IV point
• IV crush can kill a long option that was directionally right

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