Option Greeks
Sensitivity metrics that describe how an option’s price changes with key drivers.
Quick facts
| Field | Value |
|---|---|
| Category | Options Trading Terminology |
| Use | Learn vocabulary to read chains and manage risk |
Definition
Greeks are like a “risk dashboard”. Delta is direction, gamma is delta-change, theta is time decay, vega is volatility sensitivity, and rho is interest-rate sensitivity. They help you understand why P&L moves even if price is flat.
Quick example
Info
Example: A long straddle may lose from theta even when the underlying doesn’t move.
Relative impact on P&L (illustrative, typical retail)
Delta and theta often matter most day-to-day; vega around events.
Where you’ll see it
- Option chain (strikes/expiries/OI/volume)
- Order window (market/limit/SL)
- Positions page (P&L and Greeks)
Common confusion
Avoid treating a single term as a “signal”. Terms help you describe risk; decisions should come from a complete plan (view, sizing, exits, and liquidity).
Summary
- Sensitivity metrics that describe how an option’s price changes with key drivers.
- Use this term to communicate risk and intent clearly.