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Option Greeks Explained (Delta, Gamma, Theta, Vega)

By Allen Krewzz
Published July 4, 2026Updated July 4, 2026
Option Greeks Explained (Delta, Gamma, Theta, Vega)

Delta: Sensitivity to Price

Gamma: The Rate of Change of Delta

Theta: Time Decay

Theta generally works against option buyers and in favor of option sellers, which is one reason some income-focused strategies — like [covered calls](covered-call-strategy-explained) — involve selling options rather than buying them.

Vega: Sensitivity to Volatility

Why the Greeks Matter

Common Mistakes

Conclusion