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Financial glossary



Greeks are sensitivities of derivative prices to all factors on which they depend (underlying price, maturity, volatility, risk free rate):

  • (delta): sensitivity to underlying price.
  • (theta): sensitivity to time to maturity.
  • (vega): sensitivity to volatility.
  • (rho): sensitivity to risk-free rate.
  • (gamma): sensitivity of delta to the underlying price.

Derivatives are mainly used to hedge certain risks. Greeks indicate the inverse of the derivative quantity needed to optimally hedge targeted risks. For example, the purchase of 20 puts with a delta of -0.50, will hedge (against underlying movements) a long position of 10 underlying stocks.

Growth investing

Growth Investing focuses on stocks whose sales and/or earnings are expected to increase above the market or industry average rates.  Typically, Growth stocks show low Dividend Yield and/or high valuation ratios (Price to Earnings Ratio…).