Question 1

Which Greeks matter most for beginners?

Accepted Answer

Start with delta and theta. Delta tells you how much your option moves per $1 change in the stock (e.g., 0.50 delta means the option gains $0.50 for every $1 the stock rises). Theta tells you how much value your option loses each day from time decay. These two explain 80% of what happens to your position.

Question 2

What is theta decay and why does it matter?

Accepted Answer

Theta decay is the daily erosion of an option's time value. Options are wasting assets — they lose a little value every day, accelerating as expiration approaches. If you buy a call and the stock doesn't move, theta bleeds your position. This is why option buyers need the stock to move in their direction quickly. Option sellers collect theta as income.

Question 3

What does delta tell me about probability?

Accepted Answer

Delta roughly approximates the probability that the option expires in the money. A 0.30 delta call has approximately a 30% chance of expiring ITM. This isn't exact, but it's a useful mental model. Deep ITM options (0.80+ delta) move almost like stock; far OTM options (0.10 delta) are cheap lottery tickets with low probability.

What Are the Options Greeks? Delta, Theta, Gamma & Vega Explained

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