The Greeks are measures of how an option's price reacts to different things. Your broker shows them on the option chain.
Delta
How much the option's price should change for a $1 move in the stock. A delta of 0.50 means the option gains about $0.50 per share if the stock rises $1. Calls have positive delta, puts negative. Delta is also used as a rough guess of the chance of finishing in the money.
Gamma
How fast delta itself changes as the stock moves. It is highest for at-the-money options near expiration.
Theta
Time decay: how much value the option loses each day if nothing else changes. A theta of -0.05 means about five cents per share (five dollars per contract) per day. It works against option buyers and for sellers, and it speeds up near expiration.
Vega and implied volatility (IV)
Implied volatility is the market's estimate of how much the stock will move, built into the option price. Vega shows how much the price changes when IV changes by one point.
- High IV means pricier options.
- IV often rises before earnings and drops sharply after. That drop is called IV crush, and it can make an option lose value even when the stock moves your way.
Education only, not investment advice. Trading involves real risk of loss, including loss of everything you put in. See the full disclaimer.