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Tackle Today: The Options Greeks

July 10, 2020

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Learn what impacts your options value

Traders,

When trading options, there are more things that impact your profit or loss than whether the price of your underlying moves up or down. 

Delta measures the impact of price moving, and it is an important options Greek.  But it is not the only one you need to pay attention to when making decision on which options to play, which options strategies to play and how to select your options. In fact, there are 5 options Greeks that will impact the value of your options.

  • Delta = measure the impact of price moving up or down
  • Theta = measures the impact of time passing
  • Vega = measures the impact of implied volatility changing
  • Gamma = measures the impact of a change in Delta
  • Rho = measures the impact of interest rates changing

If you learn how to use the options Greeks, you will become a more informed trader.  Trading with knowledge of how the math works that goes into the Black Scholes Model will simply give you more confidence in your strategies, more understanding of why you are winning or losing on a trade and more information to build better trades.

Here is the challenge of the day, spend some time learning the Options Greeks.  Coach Noah Davidson built a video playlist on our YouTube channel that teaches you about the Greeks, what the Black Scholes model is and what each Option Greek is.  There are 7 videos in total, and you can work through the playlist in about 30 minutes. 

Access the Options Greeks Tutorials here: https://www.youtube.com/playlist?list=PL-6LZY6du8ku-wFVSvUJNz55-7ZYABPVb

When you hear traders describe themselves or their trades as a ‘Delta’ ‘Theta’ or ‘Vega’ trade, they are referring to the style of trading they are taking and essentially which options Greek their strategy is dependent on.  Make a commitment to study the options Greeks, it will be time well spent.

#TeamTackle


Chart of the Day

Options Greeks

Delta, Theta, Vega, Gamma and Rho are the Options Greeks.  The Black Scholes Model is the formula that determines options pricing in the market.  Download the Options Greeks guide to learn more about them: https://tackletrading.com/store/tackle-trading-options-greeks-guide/


Video of the day

What are Options Greeks (BONUS: Free Guide)

Listen in as Coach Noah explains what the Options Greeks are, and stay to watch all of the 7 videos in the series. 


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