Part 4 Learn Institutional Trading

Option Greeks (Risk Measures)

Greeks are mathematical tools that measure how sensitive an option is to different factors:

Delta: Sensitivity to price change. (How much option moves if stock moves ₹1).

Gamma: Rate of change of delta.

Theta: Time decay (how much option loses value as expiry nears).

Vega: Sensitivity to volatility.

Rho: Sensitivity to interest rates.

Traders use Greeks to build precise strategies.

Option Strategies

Options can be combined into powerful strategies:

Single-leg: Buy call, Buy put, Sell call, Sell put.

Spreads: Bull call spread, Bear put spread.

Neutral strategies: Iron condor, Butterfly spread, Straddle, Strangle.

Advanced: Calendar spread, Ratio spread.

Each strategy suits different market conditions (bullish, bearish, sideways, volatile).