Options Greeks measure the different risks that are associated with trading options. They are named after Greek letters and aim to help traders calculate the risk involved with their trades.

• Delta – This measures the options price sensitivity to the underlying market. Traders can use this to calculate the impact of market movement on your options value.

• Gamma – deriving itself from delta, this measure looks into how much an options’ delta moves for each point in the underlying market.

• Theta – Related to time, this measure indicates the price decay of the option over time. If the option is close to the expiration date then its Theta will be higher than if the expiration date was further away.

• Vega – Indicating the sensitivity of the option to the volatility of the underlying market, this measure indicates how much the value of the option will change for every 1% change in volatility.

• Rho – The final measure indicates how much an options price will move in relation to interest rate changes. Should an interest rate change cause the option’s price to increase then the value of Rho will be positive. If the interest rate change causes a decrease in the price of the option then the value of Rho will be negative.

'Intrinsic value' is the amount by which the strike price of an option is profitable in comparison to the price of the underlying. An options is said to have an 'Intrinsic Value' if its immediate exercise would result in a financial advantage for the buyer. Options that meet this definition are said to be 'In-the-Money'. Where an option would not result in a financial advantage for the buyer upon immediate exercise, it is said to be 'Out-the-Money'.

Depending on the individual option specification (as defined by the exchange), the majority of option contracts that are deemed to be 'In-the-Money' at expiration will be automatically exercised resulting in a position in the underlying.

The exercise of an option will result in a position in the underlying futures contract, which will require the full initial margin relevant to the new position. You should ensure prior to the exercise that your account has sufficient funds available to cover such margin requirements. Failure to do so may lead to portfolio liquidation as outlined in the Terms of Business.

Consideration should be given prior to initiating an early exercise request. However, if you wish to early exercise your option(s) (subject to option type as explained above), please contact client services at [email protected] to initiate your request. Exercise instructions should be received prior to midday (12pm) UK time for same day processing. Instructions are subject to exchange procedures and will only be deemed as accepted once Tickmill receive confirmation that early exercise has been accepted/actioned. Once an option early exercise request has been recieved by Tickmill, the option can no longer be closed (via standard trading/execution activity).

Please note that it is at the discretion of Tickmill to allow the early exercise of an option contract and may be dependent on the account maintaining sufficient funds to meet the new underlying position initial margin requirements.

Contrarian instructions allow you to request that an ‘In-the-Money’ option (that would normally be exercised automatically) be abandoned instead (i.e. not exercised); or an ‘Out-the-Money’ option (that would normally be abandoned) be exercised instead. Contrarian instructions are not allowed on some option contracts, and clients should check the individual exchange specifications for more information.