Greeks
A set of risk measures that describe how an option price changes relative to various factors.
Explanation
The primary Greeks are Delta (price sensitivity), Gamma (delta sensitivity), Theta (time decay), Vega (volatility sensitivity), and Rho (interest rate sensitivity). Understanding Greeks is essential for risk management, position sizing, and constructing hedged portfolios. Greeks are additive across positions.
Example
Your portfolio has a total delta of +200, gamma of -50, theta of +$45/day, and vega of -300. This tells you the portfolio is bullish, short gamma, collecting time decay, and benefits from falling IV.