Understanding Greeks
The “Greeks” are measurements that tell you how your options positions are affected by different market factors. You don’t need to be a math expert — here’s what each one means in practical terms.
Where Greeks Appear
You’ll see Greeks in two places:
- KPI Strip — A compact summary (Δ, Γ, Θ, ν)
- Controls Panel — A more detailed grid with directional labels
These show your portfolio-wide Greeks — the combined effect across all your open positions.
The Four Greeks
Delta (Δ) — Directional Risk
What it means: How much your portfolio gains or loses when the underlying moves $1.
| Delta | Direction | What It Means |
|---|---|---|
| +50 | Bullish | You make ~$50 if the market goes up $1, lose ~$50 if it goes down |
| -30 | Bearish | You make ~$30 if the market goes down $1, lose ~$30 if it goes up |
| Near 0 | Neutral | You don’t care much which way the market moves |
For iron condors and credit strategies, your delta should be close to zero. That means you’re market-neutral — you profit from time passing, not from the market moving.
What to watch for:
- Delta drifting far from zero means you’re exposed to directional moves
- The dashboard labels it: Bullish (above 10), Bearish (below -10), or Neutral (between -10 and +10)
💡 A delta near zero is usually what you want for premium-selling strategies. If it gets too large, the bot may adjust or you might want to review your positions.
Gamma (Γ) — Rate of Change
What it means: How fast your delta changes when the underlying moves. Think of it as the “acceleration” of your directional risk.
- High gamma — Your delta changes quickly with market moves (more unpredictable)
- Low gamma — Your delta is stable
For premium sellers, lower gamma is better. 0DTE options have very high gamma, which is why they can be volatile.
Theta (Θ) — Time Decay
What it means: How much money your portfolio makes (or loses) just from time passing, per day.
| Theta | Color | What It Means |
|---|---|---|
| Positive (e.g., $45/day) | Green, labeled “Earning” | Time is your friend — you earn $45 for every day that passes (with all else equal) |
| Negative (e.g., -$20/day) | Red, labeled “Paying” | Time is working against you — you lose $20 per day |
For credit sellers, theta should be positive. This means you’re earning money from time decay — the foundation of premium-selling strategies.
💡 Positive theta is your best friend as a premium seller. Every day that passes and the market stays calm, you make money.
Vega (ν) — Volatility Sensitivity
What it means: How much your portfolio gains or loses when implied volatility changes by 1%.
- Positive vega — You benefit when volatility increases
- Negative vega — You benefit when volatility decreases
For credit sellers, vega is typically negative — you sold options, so you want volatility to drop (making the options you sold cheaper to buy back).
Practical Summary
For a typical premium-selling portfolio (iron condors, credit spreads):
| Greek | Ideal Value | Why |
|---|---|---|
| Delta | Near 0 | You want to be market-neutral |
| Gamma | Small negative | Lower = more stable portfolio |
| Theta | Positive | You earn money from time passing |
| Vega | Negative | You benefit from volatility decreasing |
The Portfolio Delta Chart
Below the P&L chart, there’s a Portfolio Delta chart that tracks how your delta exposure has changed throughout the day. This helps you spot if your portfolio is becoming too directional.
- Line above zero — Bullish exposure
- Line below zero — Bearish exposure
- Line near zero — Neutral (ideal for most strategies)
If you see the delta line trending far from zero, it might be time to:
- Check if a position has moved significantly against you
- Consider if you need to add a counter-directional position
- Review your strategy’s delta targets
Don’t Overcomplicate It
If you remember just two things about Greeks:
- Theta positive = good (you’re earning money from time)
- Delta near zero = safe (you’re not betting on market direction)
Everything else is secondary for most dashboard monitoring.