Modules for Traders
Using Options Greeks
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Relationship between the Greeks
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Let us understand how Greeks, Delta, Gamma, Theta and Vega are related
"Relationship between the Greeks In this module, we kept harping on the Option Greeks, namely, delta, gamma, theta and vega. Let’s learn what their relationship is like! Option Greeks are the ingredients of a recipe that eventually come together to make a wholesome dish. Here is how Greeks, also have a major impact on each other: Delta : Measure of option price sensitivity to changes in stock price. Gamma: Measure of option price sensitivity to changes in Delta. Theta: Measures the time decay of an option as we move towards expiry. Vega: Measures the sensitivity of the option price to changes in volatility.
-Volatility impacts the call and puts options in a similar fashion. Using these Greeks, traders can price options premium, understand volatility and manage risk. Read about importance and journey of technical trade analysis on Smart Money by Angel Broking and put it to actionable use."