Intro to Options

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The Greeks Explained

The Greeks are critical to understanding options and related risk management. We take a deep dive into the Greeks here.

As we now know, the price of an option depends on many factors: the price of the asset, its **implied volatility**, the **time to expiration**, amongst other things. But how does the price of an option change as these variables change? If volatility goes up 2%, how much does my call go up? If the asset increases by $10, how much does my put go down? **The Greeks offer an answer to these questions by measuring the sensitivity of an option’s price to changes in the input parameters**. There are many different Greeks, but we will focus on just five of them.

Last modified 6mo ago

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