The Greeks are risk gauges. Each one isolates a single force acting on an option's price, so you can see why a position makes or loses money — not just that it did.
The five you need
| Greek | Measures sensitivity to… | Rule of thumb |
|---|---|---|
| Delta | a $1 move in the stock | ~ the option's price change, and a rough probability of finishing ITM |
| Gamma | how fast delta itself changes | highest near the money and near expiry |
| Theta | the passage of one day | almost always negative for buyers — time decay |
| Vega | a 1-point change in implied volatility | bigger for longer-dated options |
| Rho | a change in interest rates | usually the smallest effect |
How they fit together
Delta and gamma describe direction; theta and vega describe the cost of waiting and the price of uncertainty. A long option is typically positive delta or gamma, positive vega, and negative theta — you profit if the stock moves or volatility rises, but you bleed a little value every day it doesn't.
Example: a call with a delta of 0.45 and theta of −0.05 gains about $45 if the stock rises $1 today, but loses about $5 to time decay if it sits still (per 100-share contract).
