Understanding Options Greeks

Options pricing can feel opaque until you break it down into the Greeks, a set of measures that describe how an option's price reacts to changes in the market. Here's a quick primer.

Delta

Delta measures how much an option's price is expected to move for every ₹1 move in the underlying. It also roughly approximates the probability of the option expiring in the money.

Gamma

Gamma measures how fast delta changes as the underlying moves. High-gamma positions can swing in exposure very quickly, which matters a lot near expiry.

Theta

Theta captures time decay: how much value an option loses purely from the passage of time, all else being equal. Option sellers generally benefit from theta; buyers fight against it.

Vega

Vega measures sensitivity to implied volatility. A rise in implied volatility increases the value of both calls and puts, independent of direction.

Watching these together, rather than just the option's price, gives you a far more complete picture of what's actually driving your position.