-
The Greeks - Stock Option Price Factors Explained
The first 1,000 people to use this link will get a 1 month free trial of Skillshare: https://skl.sh/theplainbagel01221
Intro: 00:00
Options Overview: 02:10
Delta: 02:42
Gamma: 04:00
Theta: 05:00
Vega: 05:50
Rho: 07:32
Options Explained: https://youtu.be/8YVuvI9VLqw
Today we discuss the Greeks, a set of variables that helps explain why exactly options move up and down in value as they do.
If you'd like to support the channel, you can do so at https://www.patreon.com/ThePlainBagel :)
Buy a Plain Bagel Mug and support a charity! Proceeds for 2021 will be donated to Doctors Without Borders: https://store.dftba.com/collections/the-plain-bagel
Intro Music: https://www.bensound.com/royalty-free-music
DISCLAIMER:
This channel is for education purposes only and does not constitute financial ...
published: 21 Jan 2022
-
Options Pricing & The Greeks - Options Mechanics - Option Pricing
Option traders often refer to the delta, gamma, vega and theta of their option position as the "Greeks", and these metrics can provide a way to measure the sensitivity of an option's price. However, its important that you realize that the "Greeks" don't determine pricing, just reflect what could happen in pricing changes for moves in the stock, implied volatility, etc. In this video, we cover what the greeks are, and how to best understand and utilize them in your trading.
Click here to Subscribe - https://www.youtube.com/OptionAlpha?sub_confirmation=1
Want even more information on options pricing? Check out our Options Pricing Playlist here - https://www.youtube.com/playlist?list=PLhKnvfWKsu42LtgQmXvuFIf7wveXup1Fm
Looking for more? Check out our Top 10 Most Watched Videos! Whether you ...
published: 05 May 2016
-
Option Greeks Explained for Beginners
Master your understanding of the Option Greeks with helpful examples, visualizations, and logical explanations!
✅ FREE 200+ Page Options Trading for Beginners PDF and email course: https://geni.us/options-trading-pdf
✅ Learn Data-Driven Options Strategies (Course): https://geni.us/options-course
✅ Earn up to $5,000 in account funding bonuses and get my exclusive options strategy analysis course for free when you open and fund your first tastytrade account: https://geni.us/tastytrade
✅ Get my exclusive options strategy analysis course for free. Instructions here: https://geni.us/free-options-course
Master your understanding of the Option Greeks with helpful examples, visualizations, and logical explanations!
The option greeks are critical to learn as a beginner options trader because ...
published: 08 Jun 2023
-
Option Greeks Explained - Theta Delta Gamma Vega RHO | Stock Market Trading Knowledge | Share Market
Learn #OptionGreeks in Hindi | Theta Delta Gamma Vega RHO Explained for #OptionsTrading in #StockMarket.
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published: 18 Jan 2022
-
Learn The GREEKS : Option Trading 101 (w/ Examples)
Learn options basics in todays video we learn the greeks: delta, gamma, theta, rho, and vega and how we use these options to make money!
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The greeks is a term for multiple measuring factors which can determine and predict the price movement of option premiums which allows you to understand the risk exposure of those options. In simple english - these greeks - and there are 5 we ...
published: 01 Nov 2021
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Option Greeks explained in 1 minute ⏱🧠
Live trade alerts & 1-on-1 coaching: https://patreon.com/everythingoptions
Get $100 & free Premium Discord when you deposit $500: https://tradearies.com/everythingoptions Option Greeks are one of the most important things to note whenever trading options. I'll teach you all the Greeks in under 1 minute!
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Support the channel with these referral links:
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published: 10 Feb 2022
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CFA/FRM - Basics of Options Greeks Explained | Part 1(of 5)
To know more about CFA/FRM training at FinTree, visit: http://www.fintreeindia.com
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CFA | FRM | CFP | Financial Modeling
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We love what we do, and we make awesome video lectures for CFA and FRM exams. Our Video Lectures are comprehensive, easy to understand and most importantly, fun to study with!
This Video lecture was recorded by our Lead Trainer for CFA, Mr. Utkarsh Jain, during one of his live Session in Pune (India).
To know more ab...
published: 26 Aug 2020
-
Options Greeks explained in under 60 seconds
published: 06 Jul 2022
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No Math, No Problem: Learning Options Greeks through Metaphors- IBKR Podcast Ep. 139
Mat Cashman, Principal of Investor Education at the OCC, Joins IBKR’s Jeff Praissman to explain the option Greeks without math. It’s an easy and clear way of thinking about the Greeks for even the most math averse person.
Show Notes: https://ibkrcampus.com/podcasts/ibkr-podcasts/no-math-no-problem-learning-options-greeks-through-metaphors/
Interactive Brokers website: https://www.ibkr.com
Trading Education at IBKR:
Open an account at Interactive Brokers:
https://www.interactivebrokers.com/mkt/?src=TA&url=%2FUniversal%2FApplication
Trading Education at IBKR:
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Coursera: https://www.coursera.org/ibkr
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Traders’ Insight: https://ibkrcampus.com/news
IBKR Q...
published: 12 Mar 2024
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Greeks (finance)
In mathematical finance, the Greeks are the quantities representing the sensitivity of the price of derivatives such as options to a change in underlying parameters on which the value of an instrument or portfolio of financial instruments is dependent. The name is used because the most common of these sensitivities are often denoted by Greek letters. Collectively these have also been called the risk sensitivities, risk measures or hedge parameters.
This video is targeted to blind users.
Attribution:
Article text available under CC-BY-SA
Creative Commons image source in video
published: 03 Aug 2014
10:47
The Greeks - Stock Option Price Factors Explained
The first 1,000 people to use this link will get a 1 month free trial of Skillshare: https://skl.sh/theplainbagel01221
Intro: 00:00
Options Overview: 02:10
Del...
The first 1,000 people to use this link will get a 1 month free trial of Skillshare: https://skl.sh/theplainbagel01221
Intro: 00:00
Options Overview: 02:10
Delta: 02:42
Gamma: 04:00
Theta: 05:00
Vega: 05:50
Rho: 07:32
Options Explained: https://youtu.be/8YVuvI9VLqw
Today we discuss the Greeks, a set of variables that helps explain why exactly options move up and down in value as they do.
If you'd like to support the channel, you can do so at https://www.patreon.com/ThePlainBagel :)
Buy a Plain Bagel Mug and support a charity! Proceeds for 2021 will be donated to Doctors Without Borders: https://store.dftba.com/collections/the-plain-bagel
Intro Music: https://www.bensound.com/royalty-free-music
DISCLAIMER:
This channel is for education purposes only and does not constitute financial advice - Richard is not responsible for investment actions taken by viewers. Please seek out a registered advisor if you require assistance (while Richard is a registered portfolio manager at WDS Investment Management, he does not provide advice through The Plain Bagel, which is not affiliated with his employer).
https://wn.com/The_Greeks_Stock_Option_Price_Factors_Explained
The first 1,000 people to use this link will get a 1 month free trial of Skillshare: https://skl.sh/theplainbagel01221
Intro: 00:00
Options Overview: 02:10
Delta: 02:42
Gamma: 04:00
Theta: 05:00
Vega: 05:50
Rho: 07:32
Options Explained: https://youtu.be/8YVuvI9VLqw
Today we discuss the Greeks, a set of variables that helps explain why exactly options move up and down in value as they do.
If you'd like to support the channel, you can do so at https://www.patreon.com/ThePlainBagel :)
Buy a Plain Bagel Mug and support a charity! Proceeds for 2021 will be donated to Doctors Without Borders: https://store.dftba.com/collections/the-plain-bagel
Intro Music: https://www.bensound.com/royalty-free-music
DISCLAIMER:
This channel is for education purposes only and does not constitute financial advice - Richard is not responsible for investment actions taken by viewers. Please seek out a registered advisor if you require assistance (while Richard is a registered portfolio manager at WDS Investment Management, he does not provide advice through The Plain Bagel, which is not affiliated with his employer).
- published: 21 Jan 2022
- views: 94354
31:33
Options Pricing & The Greeks - Options Mechanics - Option Pricing
Option traders often refer to the delta, gamma, vega and theta of their option position as the "Greeks", and these metrics can provide a way to measure the sens...
Option traders often refer to the delta, gamma, vega and theta of their option position as the "Greeks", and these metrics can provide a way to measure the sensitivity of an option's price. However, its important that you realize that the "Greeks" don't determine pricing, just reflect what could happen in pricing changes for moves in the stock, implied volatility, etc. In this video, we cover what the greeks are, and how to best understand and utilize them in your trading.
Click here to Subscribe - https://www.youtube.com/OptionAlpha?sub_confirmation=1
Want even more information on options pricing? Check out our Options Pricing Playlist here - https://www.youtube.com/playlist?list=PLhKnvfWKsu42LtgQmXvuFIf7wveXup1Fm
Looking for more? Check out our Top 10 Most Watched Videos! Whether you are only familiar with stock trading and the stock market and want to learn how to trade options, or are already an advanced trader, there is something in this list for you - https://www.youtube.com/playlist?list=PLhKnvfWKsu42bE1u3wj6zZphZWbPB8DUI
Welcome to the Option Alpha YouTube Channel! Our mission is to provide traders like you with the most comprehensive options trading and investing education available anywhere, free of charge. We're here to help you take your trading and financial education to the next level! For more, visit our website at http://www.optionalpha.com
https://wn.com/Options_Pricing_The_Greeks_Options_Mechanics_Option_Pricing
Option traders often refer to the delta, gamma, vega and theta of their option position as the "Greeks", and these metrics can provide a way to measure the sensitivity of an option's price. However, its important that you realize that the "Greeks" don't determine pricing, just reflect what could happen in pricing changes for moves in the stock, implied volatility, etc. In this video, we cover what the greeks are, and how to best understand and utilize them in your trading.
Click here to Subscribe - https://www.youtube.com/OptionAlpha?sub_confirmation=1
Want even more information on options pricing? Check out our Options Pricing Playlist here - https://www.youtube.com/playlist?list=PLhKnvfWKsu42LtgQmXvuFIf7wveXup1Fm
Looking for more? Check out our Top 10 Most Watched Videos! Whether you are only familiar with stock trading and the stock market and want to learn how to trade options, or are already an advanced trader, there is something in this list for you - https://www.youtube.com/playlist?list=PLhKnvfWKsu42bE1u3wj6zZphZWbPB8DUI
Welcome to the Option Alpha YouTube Channel! Our mission is to provide traders like you with the most comprehensive options trading and investing education available anywhere, free of charge. We're here to help you take your trading and financial education to the next level! For more, visit our website at http://www.optionalpha.com
- published: 05 May 2016
- views: 658935
14:45
Option Greeks Explained for Beginners
Master your understanding of the Option Greeks with helpful examples, visualizations, and logical explanations!
✅ FREE 200+ Page Options Trading for Beginners ...
Master your understanding of the Option Greeks with helpful examples, visualizations, and logical explanations!
✅ FREE 200+ Page Options Trading for Beginners PDF and email course: https://geni.us/options-trading-pdf
✅ Learn Data-Driven Options Strategies (Course): https://geni.us/options-course
✅ Earn up to $5,000 in account funding bonuses and get my exclusive options strategy analysis course for free when you open and fund your first tastytrade account: https://geni.us/tastytrade
✅ Get my exclusive options strategy analysis course for free. Instructions here: https://geni.us/free-options-course
Master your understanding of the Option Greeks with helpful examples, visualizations, and logical explanations!
The option greeks are critical to learn as a beginner options trader because the greeks tell you the risks your option positions are exposed to.
Option prices, and therefore, your profits and losses, change with the stock price, expected volatility, and passage of time.
The four primary option greeks are delta, gamma, theta and vega.
Delta estimates how an option's price changes relative to a $1 change in the stock price.
Gamma estimates how an option's delta changes relative to a $1 change in the stock price.
Theta estimates how an option's price will decay with the passing of each day, assuming the stock price and implied volatility remain constant.
Vega estimates how an option's price will change relative to a 1% shift in implied volatility or expected stock price fluctuations.
The greeks can be viewed from the perspective of an individual option or an entire complex option position (position greeks).
In this video, I'll explain the option greeks in detail, including helpful examples and data visualizations to help you deepen your understanding of these risk measurements.
0:00 Intro
0:15 Delta: Option Price vs. Stock Price
2:35 Gamma: Option Delta vs. Stock Price
5:34 Another Way to Think About Delta & Gamma
7:07 Theta: Option Price Decay
8:13 Vega: Option Price vs. Expected Stock Volatility
10:46 Individual Option Greeks vs. Position Greeks
13:43 Theta & Vega ONLY Impact Part of an Option's Price
=== Recommended Videos ===
➥ Options Trading for Beginners: https://youtu.be/7PM4rNDr4oI
➥ Vertical Spreads for Beginners: https://youtu.be/mwttDWfDQ9c
Disclaimer: Nothing contained in our content constitutes a solicitation, recommendation, promotion, or endorsement of any particular security, other investment product, transaction, or investment. Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involve substantial risk of loss and are not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time. Past performance is not necessarily indicative of future results. I am not a financial advisor. The ideas presented in this video are for entertainment purposes only. You (and only you) are responsible for the financial decisions that you make.
Disclosure: Some of the links in the video description are affiliate links, which means I receive a small amount of compensation if you sign up for these services using my unique link. If you want to support the channel, it's a great way to say thank you! You can always head directly to the websites mentioned in the videos to avoid giving affiliate credit, but you may miss a signup bonus. tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Project Finance(Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’ brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade.
https://wn.com/Option_Greeks_Explained_For_Beginners
Master your understanding of the Option Greeks with helpful examples, visualizations, and logical explanations!
✅ FREE 200+ Page Options Trading for Beginners PDF and email course: https://geni.us/options-trading-pdf
✅ Learn Data-Driven Options Strategies (Course): https://geni.us/options-course
✅ Earn up to $5,000 in account funding bonuses and get my exclusive options strategy analysis course for free when you open and fund your first tastytrade account: https://geni.us/tastytrade
✅ Get my exclusive options strategy analysis course for free. Instructions here: https://geni.us/free-options-course
Master your understanding of the Option Greeks with helpful examples, visualizations, and logical explanations!
The option greeks are critical to learn as a beginner options trader because the greeks tell you the risks your option positions are exposed to.
Option prices, and therefore, your profits and losses, change with the stock price, expected volatility, and passage of time.
The four primary option greeks are delta, gamma, theta and vega.
Delta estimates how an option's price changes relative to a $1 change in the stock price.
Gamma estimates how an option's delta changes relative to a $1 change in the stock price.
Theta estimates how an option's price will decay with the passing of each day, assuming the stock price and implied volatility remain constant.
Vega estimates how an option's price will change relative to a 1% shift in implied volatility or expected stock price fluctuations.
The greeks can be viewed from the perspective of an individual option or an entire complex option position (position greeks).
In this video, I'll explain the option greeks in detail, including helpful examples and data visualizations to help you deepen your understanding of these risk measurements.
0:00 Intro
0:15 Delta: Option Price vs. Stock Price
2:35 Gamma: Option Delta vs. Stock Price
5:34 Another Way to Think About Delta & Gamma
7:07 Theta: Option Price Decay
8:13 Vega: Option Price vs. Expected Stock Volatility
10:46 Individual Option Greeks vs. Position Greeks
13:43 Theta & Vega ONLY Impact Part of an Option's Price
=== Recommended Videos ===
➥ Options Trading for Beginners: https://youtu.be/7PM4rNDr4oI
➥ Vertical Spreads for Beginners: https://youtu.be/mwttDWfDQ9c
Disclaimer: Nothing contained in our content constitutes a solicitation, recommendation, promotion, or endorsement of any particular security, other investment product, transaction, or investment. Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involve substantial risk of loss and are not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time. Past performance is not necessarily indicative of future results. I am not a financial advisor. The ideas presented in this video are for entertainment purposes only. You (and only you) are responsible for the financial decisions that you make.
Disclosure: Some of the links in the video description are affiliate links, which means I receive a small amount of compensation if you sign up for these services using my unique link. If you want to support the channel, it's a great way to say thank you! You can always head directly to the websites mentioned in the videos to avoid giving affiliate credit, but you may miss a signup bonus. tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Project Finance(Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’ brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade.
- published: 08 Jun 2023
- views: 75780
34:31
Option Greeks Explained - Theta Delta Gamma Vega RHO | Stock Market Trading Knowledge | Share Market
Learn #OptionGreeks in Hindi | Theta Delta Gamma Vega RHO Explained for #OptionsTrading in #StockMarket.
******************************************************...
Learn #OptionGreeks in Hindi | Theta Delta Gamma Vega RHO Explained for #OptionsTrading in #StockMarket.
*****************************************************************
Open Free Demat Account on Upstox:
https://bit.ly/DematAcUpstox
- NO AMC Charges for Lifetime
Offers valid for Limited Time. Start earning with refer and earn upto Rs 1200 per referral.
For Any Query regarding Account Opening, Call Upstox Customer Care @ 022-4179-2991
022-6904-2291
022-7130-9991
Upstox Email:
[email protected]
*****************************************************************
Open Free Demat Account on 5 Paisa: http://bit.ly/5PaisaFreeAc
Start Investing Commission Free Online. 5 Paisa has over 10 Million+ App Users and is offering attractive offers to new customers.
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About the Trainer :
Pushkar Raj Thakur is India's Leading Motivational Speaker & Business Coach. With over 3 Million Subscribers on YouTube & Millions of Followers on all other Social Media Platform, he is known for his versatile knowledge on Financial Education, Personal Mastery, Sales, Marketing, Human Psychology & Business Development.
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To Join our Courses, Call @ 9999470710
https://wn.com/Option_Greeks_Explained_Theta_Delta_Gamma_Vega_Rho_|_Stock_Market_Trading_Knowledge_|_Share_Market
Learn #OptionGreeks in Hindi | Theta Delta Gamma Vega RHO Explained for #OptionsTrading in #StockMarket.
*****************************************************************
Open Free Demat Account on Upstox:
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- NO AMC Charges for Lifetime
Offers valid for Limited Time. Start earning with refer and earn upto Rs 1200 per referral.
For Any Query regarding Account Opening, Call Upstox Customer Care @ 022-4179-2991
022-6904-2291
022-7130-9991
Upstox Email:
[email protected]
*****************************************************************
Open Free Demat Account on 5 Paisa: http://bit.ly/5PaisaFreeAc
Start Investing Commission Free Online. 5 Paisa has over 10 Million+ App Users and is offering attractive offers to new customers.
*****************************************************************
Sensibull: https://bit.ly/OfferSensibull
About the Trainer :
Pushkar Raj Thakur is India's Leading Motivational Speaker & Business Coach. With over 3 Million Subscribers on YouTube & Millions of Followers on all other Social Media Platform, he is known for his versatile knowledge on Financial Education, Personal Mastery, Sales, Marketing, Human Psychology & Business Development.
#FinancialEducation
Follow us on:
Telegram: https://t.me/PushkarRajThakurOfficial
Facebook: http://bit.ly/2TkyIYo
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LinkedIn:http://bit.ly/2RfJWel
https://www.coursedes.com
To Join our Courses, Call @ 9999470710
- published: 18 Jan 2022
- views: 3206566
15:00
Learn The GREEKS : Option Trading 101 (w/ Examples)
Learn options basics in todays video we learn the greeks: delta, gamma, theta, rho, and vega and how we use these options to make money!
🔸GET A FREE STOCK w/ PU...
Learn options basics in todays video we learn the greeks: delta, gamma, theta, rho, and vega and how we use these options to make money!
🔸GET A FREE STOCK w/ PUBLIC.com : https://pblc.co/pandreafinance
🔸Get 2 FREE Stocks w/ Webull : https://a.webull.com/i/PandreaFinance
🔸Free Stock and Paper Trade w/ Moomoo (deposit $100): https://j.moomoo.com/007xo6
🔸Get up to $250 of Crypto w/ BlockFi: https://blockfi.mxuy67.net/n1yXjR
🔸Earn Crypto w/ Coinbase: https://coinbase-consumer.sjv.io/oeOBze
FOLLOW ME ON INSTAGRAM : https://www.instagram.com/alexpandrea/
The greeks is a term for multiple measuring factors which can determine and predict the price movement of option premiums which allows you to understand the risk exposure of those options. In simple english - these greeks - and there are 5 we will go over - are there to help us measure how an option premium price will be affected in the future based on different things.
DELTA: Delta will be used to determine how much the option price of a particular contract will move - either up or down depending on how the stock price moves. So the stock price goes up? Well, how do we know what the option price will then be? We use delta! Delta is defined as the expected change in an options price relative to $1 movements in the underlying stock price. So again, Delta is going to help us determine how the option price will move for every $1 the stock moves. Delta values you’ll notice will go from 0 to +1 with calls, and 0 to -1 with puts. Thats the number that the premium price will increase or decrease by.
GAMMA: So now that we understand Delta - and how the price of the option is affected by Delta we can now understand gamma - because gamma affects delta - and delta affects the price of the option - so through this weird chain of events gamma affects the price of the option. K - Gamma is the rate of change of an options delta relative to a 1 point move of the underlying stock. So just like Delta, when the stock moves up $1, the option price is affected. So lets take an example - we have a stock trading at $10 with an option contract price of $2. The option delta is .5 and the gamma for the option is .1 - Now lets say the $10 stock increases to $11 - a 1 point move in the stock. The gamma of the option, which is .1 will affect the delta of the option which is .5 .1+.5 is .6 - so now the new delta of the option at the $11 price is .6 which in turn will affect the overall price of the option.
THETA : One very important thing to understand about options is that all options lose value as they get closer to the expiration date if all other things remain constant. So you buy an option - you’re always fighting time - and that option is losing value every day, every week, every month until at expiration there is only the intrinsic value left of that option. This is due to Theta - or Theta decay. Theta refers to the rate of decline in the value of an option due to the passage of time. Theta is usually expressed as a negative number and that number tells you how much value the option will lose every day until expiration. Now that you know all this you can see how selling options is favorable - because you can sell an option and just let Theta decay do its thing - and as the option price decreases - something it does naturally - you, as the option seller make money.
RHO : Rho measures the price change of an option in relation to risk-free interest rates. When speaking of risk-free interest rates we are talking about something like U.S. treasury bills. For example - if an option has a rho of 1.0, then for every 1 percentage-point increase in interest rates, the value of the option will increases by the amount of Rho - which is 1.
Remember, Call options generally rise in price as interest rates increase and put options decrease in price as interest rates increase. So, call options have a positive rho, while put options have a negative rho. Alrighty got that out of the way.
VEGA - Vega represents the amount that an option contract's price changes based on a 1% change in the implied volatility of the underlying stock. So just like all the other greeks, the option price is affected by something and in vegas case that something is it’s implied volatility. I think you’re getting the hang of this now I can feel it. For every 1% move up or down in implied volatility, the option price will move up or down by the amount of Vega.
I am not a financial advisor - none of the above video is meant to be taken as investment advice. I am just showcasing MY own strategy and my investments should not be tried and duplicated based solely off the information in this video for risk of losing money.
PUBLIC.com Disclaimer: "Offer valid for U.S. residents 18+ and subject to account approval. Open To The Public Investing is a member of FINRA & SIPC. Regulatory and firm fees apply. See Public.com/disclosures/."
https://wn.com/Learn_The_Greeks_Option_Trading_101_(W_Examples)
Learn options basics in todays video we learn the greeks: delta, gamma, theta, rho, and vega and how we use these options to make money!
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The greeks is a term for multiple measuring factors which can determine and predict the price movement of option premiums which allows you to understand the risk exposure of those options. In simple english - these greeks - and there are 5 we will go over - are there to help us measure how an option premium price will be affected in the future based on different things.
DELTA: Delta will be used to determine how much the option price of a particular contract will move - either up or down depending on how the stock price moves. So the stock price goes up? Well, how do we know what the option price will then be? We use delta! Delta is defined as the expected change in an options price relative to $1 movements in the underlying stock price. So again, Delta is going to help us determine how the option price will move for every $1 the stock moves. Delta values you’ll notice will go from 0 to +1 with calls, and 0 to -1 with puts. Thats the number that the premium price will increase or decrease by.
GAMMA: So now that we understand Delta - and how the price of the option is affected by Delta we can now understand gamma - because gamma affects delta - and delta affects the price of the option - so through this weird chain of events gamma affects the price of the option. K - Gamma is the rate of change of an options delta relative to a 1 point move of the underlying stock. So just like Delta, when the stock moves up $1, the option price is affected. So lets take an example - we have a stock trading at $10 with an option contract price of $2. The option delta is .5 and the gamma for the option is .1 - Now lets say the $10 stock increases to $11 - a 1 point move in the stock. The gamma of the option, which is .1 will affect the delta of the option which is .5 .1+.5 is .6 - so now the new delta of the option at the $11 price is .6 which in turn will affect the overall price of the option.
THETA : One very important thing to understand about options is that all options lose value as they get closer to the expiration date if all other things remain constant. So you buy an option - you’re always fighting time - and that option is losing value every day, every week, every month until at expiration there is only the intrinsic value left of that option. This is due to Theta - or Theta decay. Theta refers to the rate of decline in the value of an option due to the passage of time. Theta is usually expressed as a negative number and that number tells you how much value the option will lose every day until expiration. Now that you know all this you can see how selling options is favorable - because you can sell an option and just let Theta decay do its thing - and as the option price decreases - something it does naturally - you, as the option seller make money.
RHO : Rho measures the price change of an option in relation to risk-free interest rates. When speaking of risk-free interest rates we are talking about something like U.S. treasury bills. For example - if an option has a rho of 1.0, then for every 1 percentage-point increase in interest rates, the value of the option will increases by the amount of Rho - which is 1.
Remember, Call options generally rise in price as interest rates increase and put options decrease in price as interest rates increase. So, call options have a positive rho, while put options have a negative rho. Alrighty got that out of the way.
VEGA - Vega represents the amount that an option contract's price changes based on a 1% change in the implied volatility of the underlying stock. So just like all the other greeks, the option price is affected by something and in vegas case that something is it’s implied volatility. I think you’re getting the hang of this now I can feel it. For every 1% move up or down in implied volatility, the option price will move up or down by the amount of Vega.
I am not a financial advisor - none of the above video is meant to be taken as investment advice. I am just showcasing MY own strategy and my investments should not be tried and duplicated based solely off the information in this video for risk of losing money.
PUBLIC.com Disclaimer: "Offer valid for U.S. residents 18+ and subject to account approval. Open To The Public Investing is a member of FINRA & SIPC. Regulatory and firm fees apply. See Public.com/disclosures/."
- published: 01 Nov 2021
- views: 105670
0:59
Option Greeks explained in 1 minute ⏱🧠
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⏱ Timestamps ⏱
⚠️ DISCLAIMER ⚠️
I am not a financial advisor. This video is for entertainment and educational purposes only. You (and only you) are responsible for the financial decisions that you make.
https://wn.com/Option_Greeks_Explained_In_1_Minute_⏱🧠
Live trade alerts & 1-on-1 coaching: https://patreon.com/everythingoptions
Get $100 & free Premium Discord when you deposit $500: https://tradearies.com/everythingoptions Option Greeks are one of the most important things to note whenever trading options. I'll teach you all the Greeks in under 1 minute!
🔗 LINKS 🔗
Trade alerts (options, stocks, & crypto), trading tools, and weekly live sessions for only $20 / month
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💰 https://mee6.gg/m/703430407852392478
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Join the free Discord to chat with thousands of other traders & investors:
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options greeks,option greeks,option greeks explained,option greeks explains,how to use option greeks,options trading greeks,what are option greeks,what are greeks options trading,greeks options strategy,greeks options trading,options trading basics,options trading,options strategies,options trading strategies,greeks of options trading,trading options,everything options
⏱ Timestamps ⏱
⚠️ DISCLAIMER ⚠️
I am not a financial advisor. This video is for entertainment and educational purposes only. You (and only you) are responsible for the financial decisions that you make.
- published: 10 Feb 2022
- views: 51956
9:44
CFA/FRM - Basics of Options Greeks Explained | Part 1(of 5)
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We love what we do, and we make awesome video lectures for CFA and FRM exams. Our Video Lectures are comprehensive, easy to understand and most importantly, fun to study with!
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https://wn.com/Cfa_Frm_Basics_Of_Options_Greeks_Explained_|_Part_1(Of_5)
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We love what we do, and we make awesome video lectures for CFA and FRM exams. Our Video Lectures are comprehensive, easy to understand and most importantly, fun to study with!
This Video lecture was recorded by our Lead Trainer for CFA, Mr. Utkarsh Jain, during one of his live Session in Pune (India).
To know more about CFA/FRM training at FinTree, visit:
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- published: 26 Aug 2020
- views: 14712
23:34
No Math, No Problem: Learning Options Greeks through Metaphors- IBKR Podcast Ep. 139
Mat Cashman, Principal of Investor Education at the OCC, Joins IBKR’s Jeff Praissman to explain the option Greeks without math. It’s an easy and clear way of th...
Mat Cashman, Principal of Investor Education at the OCC, Joins IBKR’s Jeff Praissman to explain the option Greeks without math. It’s an easy and clear way of thinking about the Greeks for even the most math averse person.
Show Notes: https://ibkrcampus.com/podcasts/ibkr-podcasts/no-math-no-problem-learning-options-greeks-through-metaphors/
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DISCLOSURE: INTERACTIVE BROKERS
Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from GFM Asset Management and is being posted with its permission. The views expressed in this material are solely those of the author and/or GFM Asset Management and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
DISCLOSURE: OPTIONS
Options involve risk and are not suitable for all investors. Multiple leg strategies, including spreads, will incur multiple commission charges. For more information read the “Characteristics and Risks of Standardized Options” also known as the options disclosure document (ODD) or visit ibkr.com/occ
https://wn.com/No_Math,_No_Problem_Learning_Options_Greeks_Through_Metaphors_Ibkr_Podcast_Ep._139
Mat Cashman, Principal of Investor Education at the OCC, Joins IBKR’s Jeff Praissman to explain the option Greeks without math. It’s an easy and clear way of thinking about the Greeks for even the most math averse person.
Show Notes: https://ibkrcampus.com/podcasts/ibkr-podcasts/no-math-no-problem-learning-options-greeks-through-metaphors/
Interactive Brokers website: https://www.ibkr.com
Trading Education at IBKR:
Open an account at Interactive Brokers:
https://www.interactivebrokers.com/mkt/?src=TA&url=%2FUniversal%2FApplication
Trading Education at IBKR:
Traders’ Academy: https://ibkrcampus.com/academy
Coursera: https://www.coursera.org/ibkr
Podcasts: https://ibkrcampus.com/podcasts
IBKR Webinars: https://ibkrcampus.com/webinars
Traders’ Insight: https://ibkrcampus.com/news
IBKR Quant: https://ibkrcampus.com/quant
Student Trading Lab Info: https://www.ibkr.com/stl
DISCLOSURE: INTERACTIVE BROKERS
Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from GFM Asset Management and is being posted with its permission. The views expressed in this material are solely those of the author and/or GFM Asset Management and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
DISCLOSURE: OPTIONS
Options involve risk and are not suitable for all investors. Multiple leg strategies, including spreads, will incur multiple commission charges. For more information read the “Characteristics and Risks of Standardized Options” also known as the options disclosure document (ODD) or visit ibkr.com/occ
- published: 12 Mar 2024
- views: 908
22:12
Greeks (finance)
In mathematical finance, the Greeks are the quantities representing the sensitivity of the price of derivatives such as options to a change in underlying parame...
In mathematical finance, the Greeks are the quantities representing the sensitivity of the price of derivatives such as options to a change in underlying parameters on which the value of an instrument or portfolio of financial instruments is dependent. The name is used because the most common of these sensitivities are often denoted by Greek letters. Collectively these have also been called the risk sensitivities, risk measures or hedge parameters.
This video is targeted to blind users.
Attribution:
Article text available under CC-BY-SA
Creative Commons image source in video
https://wn.com/Greeks_(Finance)
In mathematical finance, the Greeks are the quantities representing the sensitivity of the price of derivatives such as options to a change in underlying parameters on which the value of an instrument or portfolio of financial instruments is dependent. The name is used because the most common of these sensitivities are often denoted by Greek letters. Collectively these have also been called the risk sensitivities, risk measures or hedge parameters.
This video is targeted to blind users.
Attribution:
Article text available under CC-BY-SA
Creative Commons image source in video
- published: 03 Aug 2014
- views: 2659