Option Greeks, alpha, and beta
A guide to the risk numbers behind professional options trading, from Delta, Gamma, Theta, and Vega for pricing options to alpha and beta for judging whether returns reflect real skill or just market risk.
Implied volatility: the market's built-in forecast
Locked until the prerequisite course is complete.
Delta: how much an option's price moves with the stock
Locked until the prerequisite course is complete.
Gamma: how Delta itself keeps changing
Locked until the prerequisite course is complete.
Theta: the clock that's always ticking against buyers
Locked until the prerequisite course is complete.
Vega: how sensitive an option is to changing volatility
Locked until the prerequisite course is complete.
Rho, and a cheat sheet for all five Greeks
Locked until the prerequisite course is complete.
Put-call parity: the relationship tying calls, puts, and the stock together
Locked until the prerequisite course is complete.
Beta: how much a stock moves relative to the market
Locked until the prerequisite course is complete.
Alpha: the return that isn't explained by market risk
Locked until the prerequisite course is complete.
Putting it together: managing a real position's risk
Locked until the prerequisite course is complete.
The Black-Scholes model: the engine that generates every Greek
Locked until the prerequisite course is complete.
Delta hedging and gamma scalping: neutralizing direction with the stock itself
Locked until the prerequisite course is complete.
Vanna, Charm, and Vomma: the Greeks of the Greeks
Locked until the prerequisite course is complete.
Portfolio Greeks: aggregating risk across multiple positions
Locked until the prerequisite course is complete.