Option Sensitivity Factors

Option sensitivity factors, or Greeks, describe how the price of an option is affected by changes in key market variables. These include sensitivity to the underlying price (Delta), price change rate (Gamma), time passing (Theta), volatility changes (Vega), and interest rate movements (Rho).

Every options position has a unique sensitivity profile defined by these factors. For traders, understanding these allows for fine-tuning a strategy to match a specific outlook on the market.

Whether seeking to profit from price action or hedging a risk, these sensitivity factors are the controls available to the trader to shape the outcome.