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13
Option Greeks (Foundation of Option Trading)

Option Greeks control how premiums move. Every trader must understand them.

Delta

Measures directional movement.

CE delta: positive (0 to 1)

PE delta: negative (0 to -1)

Theta

Time decay.
Premium decreases as expiry approaches.
Big threat for option buyers; advantage for sellers.

Vega

Impact of volatility.
High volatility = high premium.

Gamma

Rate of change of delta.
Explains how fast an option becomes reactive to price.

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