# The greeks in plain words, and strike choice (Options 101, lesson 6 of 10)

Canonical URL: https://mrkts.gg/learn/options/greeks
Last updated: Nov 9, 2026, 9:00 AM ET

> Delta, gamma, theta and vega without the math: estimate how an option's price reacts, and use delta to compare strikes.

What you'll be able to do: Use delta, gamma, theta, and vega to estimate price changes, and use delta as a rough guide when choosing strikes.

## Four dials, not one number

An option's price reacts to the stock price, to time passing, and to implied volatility. The Greeks put a number on each reaction.

- Delta: the stock price.
- Gamma: how fast delta changes.
- Theta: time passing.
- Vega: implied volatility.

> **Key idea:** Each Greek is an estimate that assumes one thing changes at a time.

## Delta: price change per $1

*Chart (Delta against Stock price, priced with Black-Scholes):* Delta of a 50 call as the stock moves, IV 30% and 30 days left. It runs from near 0 far below the strike to near 1 far above it, and is about 0.5 at the strike.

1. A call at 3.00 with delta 0.60: the stock rises $1, so the call gains about 0.60 a share.
2. Per contract: 0.60 × 100 = about +$60.
3. A put with delta −0.25: the stock rises $2, so the put loses about 0.50 a share.

## Gamma: delta isn't fixed

Delta changes as the stock moves. Gamma is how fast. Close to expiration, an at-the-money option's delta can swing from near 0 to near 1 across a few dollars.

*Chart (Delta of a 50 call against Stock price, priced with Black-Scholes):* Delta of a 50 call at 30 days and at 3 days to expiration, IV 30%. The 3-day line is much steeper around 50, which is gamma.

> **Tip:** Big gamma helps the buyer on a move and hurts the seller.

## Theta and vega

| Theta | Vega |
| --- | --- |
| Time passing | Implied volatility |
| Per day, in price per share | Per 1 point of IV, in price per share |
| 50 call here: about −0.03 a day | 50 call here: about 0.06 per point |
| Hurts the buyer, helps the seller | Hurts the buyer if IV falls |

## Putting the dials together

Estimate tomorrow for the 50 call. Say the stock rises $1 and IV falls 2 points.

1. Delta: +0.52 × $1 = +0.52.
2. Theta: one day of decay = −0.03.
3. Vega: −2 points × 0.06 = −0.12.
4. Total: +0.37, so 1.72 becomes about 2.09, or about +$37 per contract.

> **Watch out:** Common mistake: treating delta as the chance you make money. A 0.15-delta call roughly tracks a 15% chance of finishing in the money. To profit, the stock must pass strike + premium.

## Delta as a guide to strikes

| 50 call (delta 0.52) | 55 call (delta 0.14) |
| --- | --- |
| Moves about 0.52 for a $1 stock move | Moves about 0.14 for a $1 stock move |
| More like owning the stock | More like a lottery ticket |
| Costs 1.72 | Costs 0.30 |

## Worked example: Three calls on a $50 stock, 30 days out (IV 30%)

*Illustrative numbers, not real quotes.*

Here is each call's price and its Greeks, per share:

|   | 45 call | 50 call | 55 call |
| --- | --- | --- | --- |
| Price | 5.22 | 1.72 | 0.30 |
| Delta (approx.) | 0.90 | 0.52 | 0.14 |
| Per-contract change for +$1 | about +$90 | about +$52 | about +$14 |
| Gamma (delta change per +$1) | about +0.04 | about +0.09 | about +0.06 |
| Theta (per day) | about −0.01 | about −0.03 | about −0.02 |
| Vega (per 1 IV point) | about 0.03 | about 0.06 | about 0.03 |
| Breakeven at expiration | 50.22 | 51.72 | 55.30 |

Now use the 50 call to estimate tomorrow. Say the stock rises $1 and IV falls 2 points:

- Delta: +0.52 × $1 = +0.52.
- Theta: one day of decay = −0.03.
- Vega: −2 points × 0.06 = −0.12.
- Total: +0.52 − 0.03 − 0.12 = +0.37, so 1.72 becomes about 2.09. Per contract, that is about +$37.
- The estimate runs a little low because delta rises as the stock rises. That is gamma at work.

## Practice

The page has 7 practice questions and 5 mastery checks for this lesson, with feedback on each wrong answer: https://mrkts.gg/learn/options/greeks

Next lesson: [Buying vs selling, and defined-risk spreads](https://mrkts.gg/learn/options/spreads.md)

Education only, not investment advice. Example numbers are illustrative, not real quotes.

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