Options traders know how to read the “Greeks” which help them to evaluate option positions and to determine option pricing sensitivity to the mathematical variables of the options pricing model.
The “Greeks” are a collection of statistical values that measure the risk involved in an options contract in relation to certain underlying variables.
The Black-Scholes Option Pricing Model incorporates the “Greeks” in the option pricing calculations which include Delta, Gamma, Theta, Vega and Rho.
