Basics of Options Trading FAQs

What does Option Greeks mean and how it is used in Option trading ?

Option Greeks measure the option's sensitivity for changes in the price, volatility, and expiration time. The spot price of an option as well as volatility and expiration time are all changing in the trading market. Options greeks allow traders to understand the effect of these changes on their position.

There are five options Greeks

  • Delta Options
  • Gamma Options
  • Vega Options
  • Theta Options
  • Rho Options

These Options greeks allow you to measure the sensitivity to changes in spot price, volatility, and expiration time.

Optional Greeks

What does it do?


This helps traders understand how the premium for an Option will change with a change in its underlying. Let's say that SBI stock rises from Rs 250 to R 270. Delta will inform you about the higher premium value of its Option.


It measures the change in delta for the change in value of the underlying instruments. Also, Delta measures the price change of premium. Gamma measures delta's speed of change.


It calculates the impact of losing time on the price of Options. It allows traders to see how much their Option loses value each day.


It will tell you how much Option's price will change with volatility.


It measures the percentage change in the Option price for each change in interest rates.

What is the work of Options ?

How many types of Options ?

What is strike price of option ?

When does Options expire?

What is the process for trading options ?

How futures and Options are different ?

How Nifty can be traded ?

What will happen when an option expires out of money ?

Do I have to pay margin in Options ?

How can the Options contracts be settled ?

What do you mean by Covered Options ?

When do you mean by Naked Options ?

What does American Options refers to ?

What does European option mean? ?

In Options , What is the meaning of At-The-Money , Out-of-the-Money (OTM) and In-The-Money ?

How to take decision on either to buy /sell call Option or put Option ?

Is it possible to trade on option of any stock or index?

How Square off and exercise an Option is different ?

What does intrinsic value of an option mean and how to calculate intrinsic value of an option ?

What does time value of an Option mean ?