THE OPTIONS COURSE- The Other Greeks

THE OPTIONS COURSE The Other Greeks T o create a delta neutral trade, you need to select a calculated ratio of short and long positions that combine to create an overall posi tion delta of zero. To accomplish this goal, it is helpful to review a variety of risk exposure measurements. The option Greeks are a set of measurements that can be used to explore the risk exposures of specific trades. Since options and other trading instruments have a variety of risk exposures that can vary dramatically over time or as markets move, it is essential to understand the various risks associated with each trade you place. DEFINING THE GREEKS Options traders have a multitude of different ways to make money by trad ing options. Traders can profit when a stock price moves substantially or trades in a range. They can also make or lose money when implied volatil ity increases or decreases. To assess the advantage that one spread might have over another, it is vital to con