Understanding Option Greeks — Delta, Gamma, Theta, Vega
The Greeks measure how an option’s price reacts to the market. Here’s a plain-English guide to the four that matter most.
On this page
Option Greeks are a set of numbers that describe how an option’s price is expected to move when the market changes. You don’t need advanced maths to use them — just a feel for what each one tells you.
Delta — direction
Delta measures how much the option’s price moves for a ₹1 move in the underlying. A delta of 0.5 means the option gains about ₹0.50 if the stock rises ₹1. It also roughly approximates the chance of expiring in the money.
Gamma — the rate of change
Gamma tells you how fast delta itself changes as the underlying moves. High gamma means delta (and so your risk) can shift quickly — important near the strike price and close to expiry.
Theta — time decay
Theta is the enemy of option buyers: it measures how much time value the option loses each day. Options are decaying assets, and theta accelerates as expiry nears.
Vega — volatility
Vega measures sensitivity to implied volatility. When volatility rises, option premiums rise (good for buyers); when it falls, they shrink.
Why they matter
Together the Greeks explain why an option’s price moved even when you guessed direction right. New to options? Start with our options trading for beginners guide. Options carry high risk and can expire worthless — trade only with money you can afford to lose.
