Kotak Mahindra Bank Limited
Education

Part 6 Learn Institutional Trading

24

Option Greeks

Option traders use “Greeks” to measure how different factors affect the price of an option:

Delta: Measures how much the option price changes with a ₹1 change in the underlying.

Gamma: Measures the rate of change of Delta.

Theta: Measures time decay – how much value an option loses each day as expiry approaches.

Vega: Measures sensitivity to volatility.

Rho: Measures sensitivity to interest rates.

Understanding Greeks helps traders manage risk and make informed decisions.

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