What are the 5 options in Greeks?

The terms collectively known as "greeks" are essential concepts in option pricing, each representing a specific aspect of the option's sensitivity to various market factors. While all but one are named after Greek letters, they serve as powerful tools for option traders and investors to understand and manage risk.

Among these greeks, Delta stands out as a crucial measure. It quantifies the change in an option's price for every $1 movement in the underlying asset's price. Understanding Delta helps traders assess how their options positions will respond to fluctuations in the market.

Gamma, another important greek, quantifies the rate of change of Delta. This means that Gamma measures how sensitive Delta is to changes in the underlying asset's price. Traders who have a good grasp of Gamma can better anticipate how their Delta exposure might evolve over time.

Theta, another critical greek, captures the time decay of an option's value. It represents the change in an option's price for the passage of one day, assuming all other factors remain constant. Theta is particularly important for option sellers, as it highlights the benefit they receive from the option's time decay.

Vega, another essential greek, measures the sensitivity of an option's price to changes in the volatility of the underlying asset. Since volatility is a key determinant of an option's price, Vega provides valuable insights into how an option's value might change in response to changes in market volatility.