Option Greeks and Hedging Strategies

Hedging options positions is not particularly easy and in several cases it is more of an art than science. This is because there are multiple ways to hedge, multiple factors to monitor at the same time and each market participant has different hedging requirements (think about a specific company that needs to defend a certain […]

The Pricing of Commodity Options

Pricing options contracts is not particularly easy to do and there are quite a lot of companies around the world whose business model gravitates around pricing options contracts. Market making options quotes (bid and ask) is a fairly large business which involves investment banks, hedge funds, brokers and independent trading houses. The current research will […]

Options Greeks: Delta, Gamma, Vega, Theta, Rho

Options are one of the most important financial derivatives traded on financial exchanges. Options are probably the best risk management derivatives one can use but they tend to be more complex in nature. Options contracts have a payoff which is not linear and the risk associated with the premium of options contracts comes from multiple […]

Options Greeks: Vanna, Charm, Vomma, DvegaDtime

There are multiple options greeks that can be used to look at the potential market risk one needs to manage. The previous research explained how the so-called first order greeks explain the interaction between factors such as changes in underlying prices, volatility and interest rates and options premiums while the present one is going to […]