Dec 26, 2015 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Covered call writers and put-sellers know that option value is impacted by the change in stock price by the amount of its Delta. Delta, one of the option Greeks, is defined as the amount an option value will change for every $1.00 change in share value. If a call...
Sep 26, 2015 | Investment Basics, Option Trading Basics, Options Calculations
The Greeks are a mathematical means of estimating the risk of stock options. Delta measures the change in the option price due to a change in the stock price, Gamma measures the change in the option delta due to a change in the stock price, Theta measures the change...
Nov 15, 2014 | Investment Basics, Option Trading Basics, Options Calculations, Stock Option Strategies
Interest rates and the option Greeks play an important role in understanding option trading basics. Rho, not considered a major Greek, measures the change in an option’s price resulting from a 1% change in interest rates. When interest rates do change, it is...
Jul 7, 2012 | Option Trading Basics
We have all heard the term “the Greeks” as it applies to stock options. Most of us know that these factors somehow explain how certain parameters can impact the value of an option premium. To avoid facing some members of the BCI community claiming that...