Anybody have any good advice for remembering the different components of that BSM equation and how they affect the price of the option? I have glanced at the formula and tried my own failed attempts to remember what happens if delta or gamma or whatever increase/decrease, how it affects the price. Any thoughts would be greatly appreciated. I know this is at best to only be one or two questions, just trying to grab low hanging fruit… hopefully assuming this is such.
You can derive most of them from the Put Call Parity formula. Then its just a case of remembering the affects of volatility (+ve related) and the passage of time.
I had thought that the Put Call Parity could lend itself. Sorry to be a bother, but could you go on to explain how volatility and the passage of time would affect the option cost. Would volatility increase option costs and the passage of time decrease costs? Thanks.
volatility increase - option cost increase
passage of time increase - option cost decrease.
The prices of most options (except deep ITM european put options) decrease as time passes
Increases in vol results in increases in option values
^^ applies to both call and put options
Awesome! Thanks guys. Maybe I have a slightly better understanding than I thought. I think the Greek factors and the fact that we’re a few days away made this more difficult than necessary. Or perhaps it was the great feedback. Either/or, thanks again!
We don’t have to remember the formula ? Do we ?!!
nope…
Just remember n(d1) is call delta and n(d1)-1 for puts
THANK GOD
Mini heart attack gone 
if you have a maths backdown.
delta is first derivative of price movement. gamma is second derivative. as the stock price passes thru the strike price, the delta is 0.5 and the gamma is at a maximum.
theta is time and is constant.
far from rocket science if you think of it like that (and a similar concept to duration and convexity).