Categories: Financial

Financial Greeks”: Exploring Forex Trading with the Greeks

Financial greeks are measures of the sensitivity of a trading position to changes in the underlying financial variables. In the forex market, these variables are most commonly the exchange rates between two currencies. These greeks are sometimes used by professional forex traders to measure and manage the risk of their positions with a greater degree of control than simply gauging the overall level of market volatility. The most common greeks are delta, gamma, vega, theta, and rho, though there are also other less-used ones such as charm, color, butterfly, and speed. Each of these measures the sensitivity of a trading position in a different way, allowing traders to customize their risk profiles precisely to the situation at hand.

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