Option Greeks Explained | Trading for Beginners

The option Greeks are used by options traders to measure an option's expected price changes relative to small changes in the stock price and implied volatility, and the passage of time.

In this video, we'll explain the four primary option Greeks and use many examples to illustrate what each Greek represents.

The four primary option Greeks are Delta, Gamma, Theta and Vega.

Delta is an option's expected price change with a $1 change in the stock price.

Gamma is an option delta's expected change with a $1 change in the stock price.

Theta is how much an option's extrinsic value is expected to decrease by with the passing of one day.

Vega is how much an option's price is expected to change with a 1% change in implied volatility.

Together, the option Greeks can be used to assess the various risk exposures an option position has, or estimate how a trade might perform if certain variables change. 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.

[juanaguilar]

This seems like a genuinely informative channel. I don't understand why it has less views than some straight up scams. Maybe because the video title isn't 4 THINGS YOU NEED TO KNOW TO BEAT THE STOCK MARKET.

[Roclaph]

Love the examples, clear explanations, and real life historical examples. Thanks Chris!!

[jinalmewada]

This is the best video for Greek options. I understood everything abt this topic. Thank u so much for the video.

[darshan.sk]

Thanks for including real life examples. Experts don't realise how helpful this is.

[aldolabuonora]

its awesom to have this masterclass for free!!!
what a wonderfull world

[goman]

Great video. I’m learning a ton from your straightforward and easy to understand explanations!

[cesara]

Awesome video with great examples (and not just theory). Thks for making this video!

[footballmom]

Just started options trading. Thank you for this very well organized and explained video.

[NeMayful]

Ha, you got me on Vega. I was confused to hear to first definition cause I remember IV is determined by the option price, not backwards.
Very informative video. Do you have a video on how to apply those Greeks in actual trading?

[Juanalcas]

Thank you! Great explanation and the graphs are very helpful.

[tonercharge]

As always, excellent job Chris. Thank you!

[krishnagiri]

Thank you Chris for the wonderful contents
Its very useful and informative and I don't think the author has made the video to gain more views/more likes

All your videos are very informative and well explained with reasons and logics. I watch your videos with a pen and a book and make notes while watching.

When we have such a course free in youtube, I don't know why people pay money to learn options trading

[gkrishna]

Oh dear you made Greeks very easy, and so trading options...!
Perfectly Splendid..!

[PriteshRPatel-lruh]

Thank you for this video. It was really useful to understand the definitions of these greeks. But one follow-on would be how to use these when determining which option to buy/sell. Also I think that you can't look at all these greeks in isolation; they've got to be taken together and understand how their value impacts option pricing.

[JaceHillegas]

Great video and explanations! Thanks!!

[GapBahnDirk]

A clear explanation of the deltas. Much appreciated Chris.

[juanmelgar]

Very clear, thank you much. Great work!

[zanea]

Thanks for one of the best videos on the subject! But what can cause option price to change without the stock price changing?

[scarboroughj]

Great video, think i will definately have to spend more time on this subject matter but this gave me a good foundational understanding before I start paper trading on we bull. I think i want to use tasty trade when i go into live trades however. like there interface

[livingalaskanative]

Thx I'm going to take this and go make a boatload...