Instructional Video: Option Sensitivity Measures: The “Greeks”

Topic Progress:

Hull, Options, Futures & Other Derivatives, Chapter 19: The Greek Letters is a 41 minute instructional video analyzing the following concepts:

* Describe and assess the risks associated with naked and covered option positions.
* Explain how naked and covered option positions generate a stop‐loss trading strategy.
* Describe delta hedging for an option, forward, and futures contracts.
* Compute delta of an option.
* Describe the dynamic aspects of delta hedging and distinguish between dynamic hedging and hedge-and-forget strategy.
* Define the delta of a portfolio.
* Define and describe theta, gamma, vega, and rho for option positions.
* Explain how to implement and maintain a gamma‐neutral position.
* Describe the relationship between delta, theta, and gamma.
* Describe how hedging activities take place in practice, and discuss how scenario analysis can be used to formulate expected gains and losses with option positions.
* Describe how portfolio insurance can be created through option instruments and stock index futures.

Shop Courses