The option greeks can be used to help ‘steer’ your options positions towards profits. This is also known as ‘Trading By The Numbers’ – or ‘Trading By The Greeks’.
Basically, every option has greek ‘numbers’ associated with where it is currently trading at – and when you start to combine positions together – all of these numbers begin to accumulate together in an ‘overall’ option trading position. And those option traders who understand how options work and how the greeks can effect their positions – they are able to actually start to manage these larger and more complex positions simply by reading the various numbers – or the accumulated ‘numbered’ position – of all the greeks – from each of the options that are in the overall position.
Using these ‘greek numbers’ they can then make adjustments and tweaks to help keep their overall position in the best possible combined set up – and ‘steer’ the overall position in the direction they wish it to go.
Many option traders are put off by the greeks – as they first appear to be too complicated to really understand – however, just spending a short amount of time learning how they work and how to properly read an option greek position can help to improve an options traders overall game dramatically.