Putting Greeks to Good Use
This commentary originally appeared Jan. 5, 2012, at 7:31 a.m. EST on Options Profits – the options trader's source for daily trading strategies and actionable trade ideas. Click here to learn more.
You can't trade options for very long without hearing about the greeks. Just as in the hard sciences, finance professionals use Greek letters to represent important variables. But instead of heat or viscosity, we're tracking variables like sensitivity to price (delta) and sensitivity to the passage of time (theta). Once you've learned what these options greeks -- these risk factors -- are, the next step is to apply them in your trading. For simplicity, let's just think about delta....301 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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