All Five Greeks on One Screen
Four inputs, six outputs, all live. The consolidation page for everything in this track.
Worth reading first: Delta: Three Questions, One Number, Gamma: Why Delta Refuses to Stay Still, Theta: Watching Time Value Bleed Out, Vega: The Greek That Moves Without the Stock
Course catalogue99 lessons
You have met the five greeks one at a time. This page puts them on one screen with the four inputs that drive them, because what is worth learning now is not what each one means. It is how they move together.
Drag any slider and watch every card react. Reading a position's greeks fluently is mostly a matter of having done this often enough that the pattern is familiar.
Four inputs, six outputs
A $95 strike against a $100 stock. Every greek and the theoretical price update from the same four inputs, and each sparkline shows that greek's own curve across the price range.
per $1 of stock
delta change per $1
per calendar day
per IV point
per rate point
The map, in one table
This course so far, compressed into something you could hand to someone else.
| Greek | Answers | Short option has | Biggest when |
|---|---|---|---|
| Delta | How much do I move per $1? | Put: positive · Call: negative | Deep in the money |
| Gamma | How fast does delta change? | Negative | At the money, near expiry |
| Theta | What do I earn per day? | Positive | At the money, near expiry |
| Vega | What if volatility moves? | Negative | At the money, long-dated |
| Rho | What if rates move? | Put: positive · Call: negative | Long-dated |
Signs are given from the seller's perspective, which is the side this course is about.
Three patterns worth knowing by heart
Gamma and theta travel together. Both peak at the money and both spike near expiration. Any setup that pays generous daily decay also repositions violently on small moves. You are not choosing between them, you are choosing a point on one line. Move the days slider to 5 and watch both cards jump at once.
Vega runs the other way from theta across time. Theta is largest with days left in single digits. Vega is largest with months to go. A 7-day position is a bet on time passing. A 90-day position is largely a bet on volatility.
Volatility flattens everything. Raise implied volatility and delta drifts towards 0.50, gamma spreads out, and every greek gets less extreme. High volatility is the market saying no strike is settled, and the greeks show that by becoming less opinionated.
Adding greeks across positions
Greeks add up, which is what makes them worth computing at all. Two short puts at 0.25 delta and one at 0.30 give a portfolio delta of 0.80, or 80 share-equivalents of directional exposure, and that is a number you can size against your account.
The same goes for the rest. Total portfolio theta tells you what the book earns on a quiet day. Total vega tells you what a market-wide volatility spike does to it. This is why correlation risk matters: five short puts on five tech names add up to one large delta and one large short-vega position, even though the position list shows five separate lines.
Where the model stops being the market
Everything on this page comes from Black-Scholes, so it is worth being clear about what that gives you and what it does not.
The model assumes volatility is constant, that price moves are smooth and lognormal, and that trading costs nothing. Real markets gap over weekends and earnings, real chains show a volatility skew the model does not contain, and real fills cost you the spread.
The greeks are still the right tool, because they are the best description available of how a position responds to a small move from where it is now. Just do not read them as a forecast. They say nothing about a gap.
What can go wrong
Treating greeks as constants. Every one is a snapshot that changes with price, time and volatility, which is what the sliders are demonstrating.
Optimising one greek on its own. Maximising theta maximises gamma. There is no free corner here.
Trusting them across a gap. Greeks describe small moves. An earnings gap is not a small move, and the approximation breaks exactly when you need it.
Key takeaways
- The five greeks are five views of one price surface, driven by the same four inputs.
- Gamma and theta peak together. High daily decay always comes with fast repositioning.
- Vega runs opposite to theta across time. Short-dated is a time bet, long-dated is a volatility bet.
- Greeks add across positions, which is what makes portfolio delta, theta and vega meaningful.
- They describe small moves from where you are now, and say nothing useful about a gap.
Check your understanding
1. You want high theta but low gamma on a short option. What configuration achieves it?
2. A short 30-day put shows positive delta, negative gamma, positive theta, negative vega. In plain English?
3. You hold three short puts with deltas 0.20, 0.25 and 0.35. What is your portfolio delta exposure?
Related lessons
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