Simplifying The Greeks: Introduction

There is an expression “It’s all Greek to me!” This idiom used in the English language means something is so complex as to not be understandable. In trading, reference is often made to “the Greeks.”

What is meant by the Greeks?

What are they and what do they mean to the trading world? Although there are several Greeks that are often mentioned, this series of articles will break down the most popular ones used by traders into simple English terms.

Greeks Versus English

Greeks are just a fancy way to refer to a math formula used to measure or explain price movement. They are not the price movement. When used on spreads, these are one day options. They don’t have to be complex.

Lots of Greeks:

• Delta
• Gamma
• Theta
• Rho
• Vega (not a Greek but a constellation)
• Vanna
• Vera
• Color
• Speed
• Ultima
• Zomma
• Dual Delta
• Dual Gamma
• Fugit
• And More...

Most Commonly Known:

• Vega
• Theta
• Delta
• Gamma
• Rho

Entire weeks could be spent on studying each Greek and the diverse ways it impacts various positions, but it comes down to keeping it simple so it can be put into practice. Each of the following short articles will explain the common Greeks in simple, useful terms so that each can be incorporated into a trader’s knowledge and trading plan.