What Do Various Greek Letters Stand for in Options?
- Delta is a measure of the change in the price of the option resulting from a change in the price of the underlying currency pair.
- Gamma is the change in delta.
- Rho relates the options price to the prevailing interest rate.
- Theta is the change over a fixed time with all other factors remaining unchanged.
- Vega, neither Greek nor Chevrolet, relates options price to implied volatility.
By Michael Duane Archer