Providing a trading edge is clearly an important objective of every trading plan. However, it pays to remember that first and foremost, trading is all about managing risk. When you trade options, you're dealing with the risks of three variables: price movement of the underlying asset, changes in volatility and time decay. To measure and effectively manage risk when trading options, we need a computerized option-pricing program that calculates and displays the "Greeks" for each option. The Greeks (Delta, Gamma, Theta and Vega) are parameters that describe how an option is expected to behave. These are the vital signs of an option. They are dynamically interrelated and change as time to expiration draws closer, as underlying asset price moves higher and lower, and as volatility expectations change. The Delta of an option is the factor that shows how much the option will change in price as the underlying asset changes in price. Gamma shows how much the option's Delta will change as the underlying asset changes in price. Theta shows how much value the option loses each day. And Vega shows how much the option's price is affected by changes in implied volatility. Professional floor traders implement trading approaches on the basis of these Greeks. As a retail options trader, you can do the same. Once you specify your price and volatility expectations, you know which options strategy to initiate. For example, when implied volatility is high, the strategy of selling option premium is logical, because implied volatility tends to revert toward its long-term average. Therefore, you capture profits as expensive option premiums decline to more reasonable levels. In addition, time decay (Theta) works in your favor with each passing day you hold your short options. The risks of this strategy are that option premiums become more expensive if implied volatility increases (Vega risk) and your position becomes unbalanced if the underlying asset moves (Delta risk and Gamma risk). The important point, however, is that a computer can quantify these risk factors, and you can manage the relative risk among them by adjusting your positions.