what is omega 
omega is a measure of options pricing similar to the option greeks that measure various characteristics of the option itself omega measures the percentage change in an option s value with respect to the percentage change in the underlying price in this way it measures the leverage of an options position understanding omegatraders use options for many reasons but one of the most important is leverage a small investment in a call option for example allows the trader to control a larger dollar value of the underlying security in other words a call option trading at 25 per contract could control 100 shares of a stock trading at 50 per share with a value of 5 000 the holder has the right but not the obligation to purchase those 100 shares at a specific price the strike price by a certain date omega is the third derivative of the option price and the derivative of gamma it is also known as elasticity to see leverage in action assume ford motor co f shares increase 7 in a given period and a ford call option increases 3 in that same period the omega of the call option is 3 7 or 0 43 this would imply that for every 1 ford stock moves the call option will move 0 43 the formula is as follows percent change in v percent change in s where v price of the option s underlying price begin aligned omega frac text percent change in v text percent change in s textbf where v text price of the option s text underlying price end aligned percent change in spercent change in v where v price of the options underlying price options greeksomega is calculated based on two of the standard option greeks delta and gamma this set of metrics provides a sense of an options contract s risk and reward with respect to different variables the most common option greeks are relationship to deltaan option s gamma is also the rate of change roc in its delta and may be called the delta of the delta the equation for omega can also be expressed v s s v omega frac partial v partial s times frac s v s v vs given that the equation for delta is v s delta frac partial v partial s s v omega can be expressed in terms of delta as s v omega delta times frac s v vs 