Glossary of Using Options Greeks

icon
  1. Delta : Measure of option price sensitivity to changes in stock price.
  2. Gamma: Measure of option price sensitivity to changes in Delta.
  3. Theta: Measures the time decay of an option as we move towards expiry.
  4. Vega: Measures the sensitivity of the option price to changes in volatility.
  5. Volatility: It is used in option pricing formulas to gauge the fluctuations in the returns of the underlying assets.
  6. Options: Contracts that give the right to buy or sell an amount of an underlying asset at a predetermined price before the contract expires.
  7. Call Option: This gives the holder the right to buy a stock
  8. Put Option: This gives the holder the right to sell a stock.
  9. Daily Volatility Formula: The formula for daily volatility is computed by finding out the square root of the variance of a daily stock price. Daily Volatility formula = √Variance

Learning & Earning is now super simple

icon

₹ 0 Equity Delivery

No Hidden Charges

icon

₹ 20 Per Order For Intraday

FAQ,Currencies & Commodities

icon

ZERO Brokerage*

on ALL Segments

icon

FREE Margin

Trade Funding

  1. Debit: the amount of money you paid to purchase a new long position, or the amount of money paid to close an existing short position.
  2. Defined Risk: This is a situation where you know precisely the maximum amount of money you can lose in any trade or spread.
  3. In-the-money (ITM): this refers to the strike price of the option relative to the current market price of the underlying.
  4. Out-of-the-money (OTM): this refers to the strike price of the option relative to the current market price of the underlying.
  5. Spread: any position that involves a combination of two or more unique options.
  6. Theta Decay: This describes the natural tendency for the value of options to lose a little bit of value every day.
  7. Daily Volatility Formula: The formula for daily volatility is computed by finding out the square root of the variance of a daily stock price. Daily Volatility formula = √Variance
  8. Annualized Volatility Formula: Annualized Volatility Formula = √252 * √Variance
  9. Historical volatility: It is based on past and concrete data, institutional investors follow a thumb rule when calculating it. It is measured using a variance.

Comments (0)

Add Comment

Get Information Mindfulness!

Catch-up With Market

News in 60 Seconds.


The perfect starter to begin and stay tuned with your learning journey anytime and anywhere.

Visit Website
logo logo

Get Information Mindfulness!

Catch-up With Market

News in 60 Seconds.

logo

The perfect starter to begin and stay tuned with your learning journey anytime and anywhere.

logo

Ready To Trade? Start with

logo
logo
Open an account