Greek Letters - Derivatives

derivatives

The Greek letters measure the changes that occur in different factors of a financial option.

The value of an option depends on a number of factors, including the underlying asset and its volatility, the expiration date, and interest rates. The "greeks" are a set of measures that describe the sensitivity of your price to these factors.

They are therefore a set of mathematical measures that describe the sensitivity of the premium price to these factors and are essential to manage the "position" that a trader / manager may have, therefore, their knowledge allows us to quantify and manage risk. before the variations in each one of the underlying variables that expressly measure each one of them.

Greek letter types in derivatives

The Greek letters are:

  • Delta.
  • Gamma.
  • Vega.
  • Theta.
  • Rho.

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