Greek Meaning Impact on Option Price Behaviour Best Usage Example (Nifty/Bank Nifty) Delta (Δ) Measures how much an option’s price changes with a 1-point move in Nifty/Bank Nifty. Higher Delta = Greater price movement with the index. ITM options have…
A Short Straddle involves selling a call option and a put option at the same strike price and expiry. It profits from minimal price movement. Ideal for low-volatility conditions, where price movement is expected to remain stable. Selling ATM options…
A Long Straddle involves buying a call option and a put option at the same strike price and expiry. It profits from significant price movement in either direction. Ideal for high-volatility conditions, where a large price move is expected but…
A Protective Put is a hedging strategy where you buy a put option to protect a long position in the underlying. It limits losses if the price unexpectedly falls. Ideal for bullish conditions, where there is a risk of price…
A Protective Call is a hedging strategy where you buy a call option to protect a short position in the underlying asset. It works best when there’s a risk of the price rising unexpectedly. Ideal for bearish conditions, where the…
Rho measures how much an option’s price changes when interest rates rise by 1%. Call options have positive Rho, meaning they increase in value when interest rates rise, while put options have negative Rho, meaning they lose value when interest…
Vega measures how much an option’s price changes with a 1% change in implied volatility (IV). Higher Vega means an option is highly sensitive to changes in volatility, while lower Vega means the option is less affected by volatility swings…
Theta represents how much an option’s price decreases every day due to the passage of time if all other factors remain constant. Since options have an expiration date, their value erodes over time, especially for ATM and OTM options. Theta…
Gamma measures how much Delta changes when the underlying index moves by 1 point. Since Delta itself changes as the price moves, Gamma helps traders understand how quickly an option’s price will react to changes in the underlying index. A…
Delta represents how much an option’s price is expected to change when the underlying index (Nifty or Bank Nifty) moves by 1 point. Call options have a positive Delta (0 to 1), meaning their value increases when the index rises,…