Option Greeks Explained for Beginners

Master your understanding of the Option Greeks with helpful examples, visualizations, and logical explanations!
✅ New to options trading? Master the essential options trading concepts with the FREE Options Trading for Beginners PDF and email course: geni.us/options-trading-pdf
🔥 Learn data-driven options strategies: optionsforbeginners.teachable...
💻 Trade Options with tastytrade (Up to $3,000 Funding Bonus): geni.us/tastytrade
💻 Maximize your trading with TrendSpider's advanced charting tools and scanners: geni.us/trendspider
Master your understanding of the Option Greeks with helpful examples, visualizations, and logical explanations!
The option greeks are critical to learn as a beginner options trader because the greeks tell you the risks your option positions are exposed to.
Option prices, and therefore, your profits and losses, change with the stock price, expected volatility, and passage of time.
The four primary option greeks are delta, gamma, theta and vega.
Delta estimates how an option's price changes relative to a $1 change in the stock price.
Gamma estimates how an option's delta changes relative to a $1 change in the stock price.
Theta estimates how an option's price will decay with the passing of each day, assuming the stock price and implied volatility remain constant.
Vega estimates how an option's price will change relative to a 1% shift in implied volatility or expected stock price fluctuations.
The greeks can be viewed from the perspective of an individual option or an entire complex option position (position greeks).
In this video, I'll explain the option greeks in detail, including helpful examples and data visualizations to help you deepen your understanding of these risk measurements.
0:00 Intro
0:15 Delta: Option Price vs. Stock Price
2:35 Gamma: Option Delta vs. Stock Price
5:34 Another Way to Think About Delta & Gamma
7:07 Theta: Option Price Decay
8:13 Vega: Option Price vs. Expected Stock Volatility
10:46 Individual Option Greeks vs. Position Greeks
13:43 Theta & Vega ONLY Impact Part of an Option's Price
14:35 Learn Data-Driven Options Strategies
=== Recommended Videos ===
➥ Options Trading for Beginners: • Options Trading for Be...
➥ Vertical Spreads for Beginners: • The Vertical Spread Op...
Disclaimer: Nothing contained in our content constitutes a solicitation, recommendation, promotion, or endorsement of any particular security, other investment product, transaction, or investment. Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involve substantial risk of loss and are not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time. Past performance is not necessarily indicative of future results. I am not a financial advisor. The ideas presented in this video are for entertainment purposes only. You (and only you) are responsible for the financial decisions that you make.
Disclosure: Some of the links in the video description are affiliate links, which means I receive a small amount of compensation if you sign up for these services using my unique link. If you want to support the channel, it's a great way to say thank you! You can always head directly to the websites mentioned in the videos to avoid giving affiliate credit, but you may miss a signup bonus. tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Project Finance(Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’ brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade.