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Old 11-21-2017, 07:37 PM
ActuariallyDecentAtBest ActuariallyDecentAtBest is offline
Join Date: Dec 2016
Posts: 157

Originally Posted by ARodOmaha View Post
I think it's important to know how the Greeks function and whether they increase or decrease. You can use the Black-Scholes formula for much of that analysis. I would also memorize Delta, Gamma, Rho, Vega, and Psi since they aren't that difficult and help you with delta-gamma problems. In the obscure case that Theta appears, I would estimate it by change in option price over change in time.
I disagree with most of this sentence in bold. Yes to memorizing delta, but do NOT memorize Gamma (just know the derivative of N(di) with respect to the stock price) and derive. You can also derive the rest of the formulas pretty easily (specifically Rho and Psi.)
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