The Greeks
Also called: greeks
A set of numbers that measure how an option’s price reacts to different forces.
The Greeks tell you how an option behaves. Delta measures sensitivity to the stock price, theta to the passage of time, vega to changes in implied volatility, and gamma to how fast delta itself changes. You do not need to master all of them to sell a covered call, but knowing delta and theta helps you pick strikes and expirations.
For example
A put with a 0.30 delta will gain about $0.30 for every $1 the stock falls, and its delta loosely implies a 30% chance it finishes in the money.
Related terms
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