Options and Greeks Cycle Review
Options and Greeks cycle review for quant interviews, covering payoffs, pricing inputs, Greeks, implied volatility, hedging, and final drills.
Candidates consolidating options-pricing and market-making basics.
Review payoff-first reasoning
You should be able to explain calls, puts, moneyness, payoff diagrams, straddles, strangles, and put-call parity before using a pricing formula.
Review pricing inputs
Options pricing depends on underlying price, strike, time, rates, dividends, and volatility. Black-Scholes, binomial trees, and Monte Carlo each encode assumptions.
Review Greeks and hedging
Delta, gamma, theta, and vega describe local risk. Delta hedging, gamma scalping, and market-making inventory decisions all rely on understanding what those Greeks miss.
Concrete final drill
Take one option position and explain payoff, premium, moneyness, delta, gamma, theta, vega, implied volatility, hedge plan, and residual risk.
Common mistakes
Candidates often memorize definitions without connecting them to risk. Interview answers should move from payoff to price to Greeks to hedging limits.
Practice the pattern
Use the LeetQuidity curriculum and calibration to turn this topic into a focused practice plan.