Part 3 Learn Institutional Trading

Option Greeks – The Science Behind Pricing

Options pricing is influenced by multiple factors. These sensitivities are known as the Greeks:

Delta – Measures how much option price changes with stock price.

Gamma – Rate of change of Delta.

Theta – Time decay (options lose value daily).

Vega – Sensitivity to volatility.

Rho – Sensitivity to interest rates.

Example: A call option with Delta = 0.6 means for every ₹10 rise in stock, option premium increases by ₹6.

Basic Option Strategies (Beginner Level)

Buying Calls – Bullish bet.

Buying Puts – Bearish bet.

Covered Call – Hold stock + sell call for extra income.

Protective Put – Own stock + buy put for downside insurance.