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The Greeks

The set of measures — delta, gamma, theta, vega, rho — that describe how an option’s price reacts to price, time, volatility and rates.

The Greeks are a set of numbers that tell you how an option's price is expected to move when something changes. Delta measures how much the premium shifts for a one-dollar move in the underlying, theta how much value you lose each day as expiration approaches, vega your sensitivity to changes in implied volatility, and gamma how fast delta itself changes. Together they turn a vague feeling about a trade into something you can actually measure.

In practice you use them to size and shape a position rather than to predict direction. Say you buy a call with a delta of 0.40: it behaves roughly like 40 shares, so if the stock rises one dollar the option gains about forty cents, before theta and volatility muddy the picture. A theta of -0.05 means you bleed about five dollars a day per contract if nothing moves.

The common mistake is treating the Greeks as fixed. They drift constantly as price, time and volatility change, so a delta-neutral position at open can be badly skewed by the afternoon. Check them as live readings, not as a promise the option will keep.

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All options terms

Call Put Strike price Premium Expiration In the money (ITM)At the money (ATM)Out of the money (OTM)Intrinsic value Time value (extrinsic)Delta Gamma Theta Vega Implied volatility (IV)Open interest Assignment Exercise Spread Break-even Probability of profit (POP)Assignment risk / early assignment LEAPS Naked (uncovered) option Rho Historical volatility (HV)Volume Bid-ask spread Moneyness Covered call Cash-secured put Vertical spread Iron condor Straddle Strangle Rolling Margin Max pain American-style option European-style option Contract multiplier Debit vs credit Volatility skew Underlying Hedge Leverage Expected move Notional value Protective put Collar Butterfly spread Iron butterfly Calendar spread Diagonal spread Credit spread Debit spread Bull call spread Bear put spread Ratio spread Synthetic position The wheel strategy Poor man’s covered call (PMCC)Box spread Put-call parity Pin risk IV crush IV rank / IV percentile Ex-dividend date Deep in the money Weeklys 0DTE (zero days to expiration)Order types (to open / to close)Buying power reduction Cash settlement Market maker Slippage Mid price Black-Scholes model

Educational use only. Quotes are delayed ~15 minutes and nothing here is financial advice. Options trading involves substantial risk of loss.