Definition
Greeks (Option Greeks)
The Greeks are a set of measures — delta, gamma, theta, vega, and rho — that describe how an option's price reacts to different factors.
Each Greek isolates one sensitivity: delta to price, gamma to changes in delta, theta to time, vega to volatility, and rho to interest rates. Together they let a trader understand and manage exactly what is driving an option position's profit or loss.
Indian option traders on Nifty and Bank Nifty use the Greeks to build balanced positions — for instance staying delta-neutral while collecting theta — and to anticipate how a position will behave into weekly expiry. Mastering the Greeks is what separates systematic option traders from those who simply guess direction.
Related terms
- DeltaDelta measures how much an option's premium changes for a ₹1 move in the underlying stock or index.
- GammaGamma measures how fast an option's delta changes as the underlying moves — the rate of change of delta.
- VegaVega measures how much an option's premium changes when implied volatility rises or falls by 1%.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.