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In options trading, understanding the "options greeks"
is important because it helps you draws out certain opinions from the
options premium to guide your options trading decisions. In a
nutshell, the "options greeks" is a way to
measure the sensitivity of an option price to changes in its
parameters. The greeks can help option traders to better
understand the potential risk and reward of an option trading position.
However, you should note that the numbers given for
each of the greeks component are strictly theoretical, as they are
only projected based on mathematical models.
Remember that the options greeks numbers also change as the conditions (like
actual price of the underlying stock, volatility) change. How the various
components of the options greeks move
as conditions change would depend on how far the strike price is from the
actual price of the underlying stock (deep ITM or ATM or deep OTM) and how much
time is left until expiration.
Options greeks numbers are normally presented in decimals that
indicate the change per share. To normalize the options greeks into
dollar value,
just multiply them by 100 (ie. the number of shares per option contract).
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