All lessonsLesson 6 · Step 1/7
The Greeks, Made Simple
Think of your option as a car
The Greeks sound scary, but they just answer: 'what makes my option's price move?'
Delta = speed. How fast your option moves when the stock moves $1.
Gamma = acceleration. How fast your speed (delta) changes.
Theta = fuel leak. Value you lose every day just by waiting.
Vega = weather. How much the market's mood (volatility) changes the price.
One-liner
Delta = speed, Gamma = acceleration, Theta = fuel leak, Vega = weather.
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