The Greeks: delta, gamma, theta, and vega
Four numbers that describe how an option's price reacts.
5 min · Advanced · Lesson 15 of 17
Step 1 of 5
Why the Greeks exist
An option's price depends on the stock's price, the time left, and how much the stock is expected to swing (volatility). The Greeks are estimates of how much the option's price changes when one of those changes and the others stay put.
- Delta: the change in the option's price for a $1 move in the stock.
- Gamma: how fast delta itself changes as the stock moves.
- Theta: the value lost each day to time decay.
- Vega: the change for a one-point move in volatility.
For entertainment and education, not investment advice.