Blog Posts

Veta, also known as Vega in options trading, is one of the essential “Greeks” used in options pricing and risk management. It measures the sensitivity of an option’s price to changes in the underlying asset’s volatility. Understanding Veta is important for market makers, options traders, and risk managers who specialize in volatility and/or Theta strategies, […]

Vomma, also known as Volga or Vega Convexity, is an advanced concept in options trading and risk management. It is one of the higher-order Greeks used to measure and manage the sensitivity of option positions. Vomma shows how the Vega of an option changes as the underlying asset’s volatility fluctuates. With positive Vomma, a position […]

Charm, also known as delta decay or delta bleed, is one of the second-order Greeks used in options trading. It measures the rate of change in an option’s delta with respect to time, assuming all other factors remain constant. Understanding charm can help traders better manage their options positions and anticipate how their delta exposure […]

Rho is one of the “Greeks” used in options trading and analysis. It measures the sensitivity of an option’s price to changes in the risk-free interest rate. While less commonly discussed than other Greeks like delta or theta, rho is important in understanding and managing options positions, especially for longer-term options or in environments with […]

Overconfidence can be a trader’s worst enemy.  We look the dangers of overconfidence in trading, the importance of intellectual humility, probabilistic thinking, and strategies to maintain a balanced perspective.   Key Takeaways – Overconfidence in Trading Absolute certainty is dangerous Avoid using terms like “will” or “always” when predicting market movements. There’s almost never such […]

Hot money refers to funds that move quickly between financial markets in search of the highest short-term interest rates or anticipated currency gains. This concept is important in understanding certain trading styles and market dynamics.   Key Takeaways – Hot Money (Definition and Characteristics) Hot money is characterized by: Short-term investment horizon – often considered […]

Greg Coffey is an Australian hedge fund manager known for his exceptional trading skills, particularly in emerging markets.  He gained prominence during his time at GLG Partners and Moore Capital Management, where he managed billions of dollars and earned a reputation as one of the industry’s top performers.  Coffey is known for his intense work […]

Vanna is a second-order Greek used in options trading and risk management.  It measures:  the rate of change in an option’s vega with respect to changes in the underlying asset’s price, or the sensitivity of the option delta with respect to change in volatility In other words, Vanna quantifies how an option’s sensitivity to volatility […]

Theta, often referred to as time decay, is one of the most popular “Greeks” in options trading. It measures the rate at which an option’s value decreases as time passes – assuming all other factors remain constant. Understanding Theta is important for options traders, as it directly impacts the profit/loss of their positions.   Key […]

Vega is one of the “Greeks” used in options trading and risk management. It measures the sensitivity of an option’s price to changes in the underlying asset’s implied volatility. Vega is an important concept for options traders and investors to understand, as it provides insights into how volatility affects option prices.   Key Takeaways – […]