A study on call_and_put_options

Jun 28th, 2015
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A. T. Still University
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Option Greeks The mathematical characteristics of the Black-Scholes model are named after the Greek letters used to represent them in equations. These are known as the Option Greeks. The 5 Option Greeks measure the sensitivity of the price of stock options in relation to 4 different factors; 1. Changes in the underlying stock price, 2. Interest rate, 3. Volatility, 4. Time decay.

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Option Greek: Theta(An overview)Submitted to: Prf. Neeraj GogoiSubmitted by: Ashish K Shrivastava (PGDMF023)Option GreeksThe mathematical characteristics of the Black-Scholes model are named after the Greek letters used to represent them in equations. These are known as the Option Greeks. The 5 Option Greeks measure the sensitivity of the price of stock options in relation to 4 different factors; 1. Changes in the underlying stock price, 2. Interest rate, 3. Volatility, 4. Time decay. Option Greeks allow option traders to objectively calculate changes in the value of the option contracts in their portfolio with changes in the factors that affects the value of stock options. The ability to mathematically calculate these changes gives option traders the ability to hedge their portfolio or to construct positions with specific risk/reward profiles. This alone makes knowing the Option Greeks priceless in options trading. For the amateur trader, knowing the delta (Greek Symbol ) of your options position is the most important as it gives you an indication of how your option's value will change with movements in the underlying stock price - all other variables remaining the same. Knowing your time decay (theta ) gives you an indication of how much time value your options trading position is losing each day - all other variables remaining the same. Professionals use the Option Greeks to measure exactly how much they need to hedge their portfolio an

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