Option Greeks

Sorry ,you will need to tab this photo in another window,soo small for u to see clearly,

Option greeks mean calulation formula of the underlying stock movement
DELTA-Call options, a delta of 0.7 means that for every $1 the underlying stock increases, the call option will increase by $0.70.

Put option deltas, on the other hand, will be negative, because as the underlying security increases, the value of the option will decrease. So a put option with a delta of -0.7 will decrease by $0.70 for every $1 the underlying increases in price.

As an in-the-money call option nears expiration, it will approach a delta of 1.00, and as an in-the-money put option nears expiration, it will approach a delta of -1.00.


GAMMA-The rate of change for delta with respect to the underlying asset's price. .
example when the stock go up by $1 to $51,a call option of delta 0.7 will increase in value of $0.70,after this gamma of $0.05 will be added on to the original 0,7 delta.if the stock increase another $1 to $52.the delta for the option will be 0.705 ,added from the gamma.

VEGA-The amount that the price of an option changes compared to a 1% change in volatility.

Vega changes when there are large price movements in the underlying asset and vega falls as the option gets closer to maturity. Vega can change even if there is no change in the price of the underlying asset, this would happen if there is a change in expected volatility.

For example, if the vega of an option is -96.94 and if implied volatility were to rise by 1% then the option value would fall by $96.94.

Theta-A measure of the rate of decline in the value of an option due to the passage of time. Theta can also be referred to as the time decay on the value of an option. If everything is held constant, then the option will lose value as time moves closer to the maturity of the option.

For example, if the strike price of an option is $1,150 and theta is 53.80, then in theory the value of the option will drop $53.80 per day.

The measure of theta quantifies the risk that time imposes on options as options are only exercisable for a certain period of time. Time has importance for option traders on a conceptual level more than a practical one, so theta is not often used by traders in formulating the value of an option.

For another option greeks Rho, I do not want to explain further,due to it are not so important for traders