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Options Greeks in plain English
Options traders talk in Greek, and it scares people off. It shouldn't. Each "Greek" is just a sensitivity — a number that says "if this one thing moves, the option's price moves by that much." Four of them do most of the talking.
The four, one at a time
- Delta — speed. If the stock moves up ₹1, how much does the option move? A Delta of 0.5 means about ₹0.50. It also loosely reads as "roughly how call-like this position is right now."
- Gamma — acceleration. Delta isn't fixed; it changes as the underlying moves. Gamma measures how quickly. High Gamma means your Delta can swing fast — thrilling near the strike, dangerous if you're on the wrong side.
- Theta — the clock. Options are wasting assets. Every day that passes, a little value drips out simply because there's less time for things to happen. Theta is that daily leak — a cost if you own the option, income if you sold it.
- Vega — nerves. When the market gets jumpy, options get more expensive (bigger moves become plausible). Vega measures how much the price responds to that change in expected volatility.
Delta is speed, Gamma is acceleration, Theta is the clock ticking, Vega is the market's nerves. (There's also Rho — sensitivity to interest rates — which usually sits quietly in the corner.)
Why traders care about all of them at once
A real position has all four Greeks at the same time, and its risk is the combination. You might love an option's Delta but get quietly bled by its Theta, or blindsided when Vega collapses after an event. Serious options traders don't watch price alone — they watch the Greeks, and often hedge the ones they don't want exposure to. Understand these four and the option chain stops looking like noise and starts looking like a dashboard.