Vanna is the sixth options greek to be discussed in my series of articles explaining the options greeks. From this point on, the options greeks become a little more obscure. However, if you are making a trade that involves one of the lesser used options greeks (such as a delta hedged position trade), you will need to know about them.

As a trader from Deutsche Bank once said about some of the more obscure options greeks (including vanna):

If you don’t incorporate them into your pricing functions, you’ll enjoy extreme but brief popularity, sell lots of cheap exotic options, and then go spectacularly bust.

Therefore, my explanation of vanna will explain what vanna represents, and how vanna is used to determine how the delta or vega of an options or warrants contract will change as the volatility or price of its underlying market changes, so that you can avoid going "spectacularly bust".

Gamma (Γ) is the fifth options greek to be discussed in my series of articles explaining the options greeks. My explanation of gamma will explain what gamma represents, and how gamma is used to determine how the delta of an options or warrants contract will change as the price of its underlying market changes.

... and the next minute, they've repossesed your bentley, and your kids don't go to college.

This quote from Louis Winthorpe in the movie Trading Places illustrates quite well how a trading situation can change very quickly, and what was a profitable trade thirty seconds ago, is now on its way to becoming (or has already become) a losing trade. Given the volatile nature of trading, it is essential that traders are able to react to any new situations promptly, and adjust their trading accordingly. In other words, traders need to be able to exit their trades at any time, and cannot afford to be sentimental about any of their trades.

It seems like such an obvious thing to say "don't be sentimental about your trades", but sentimental trading is a common problem among new traders, and it therefore needs to be discussed. My discussion of sentimental trading explains what sentimental trading is, what causes it, and how it can be overcome, and is essential reading for all new traders (especially those who still have that moth eaten souvenir t-shirt from their holiday in Greece ten years ago).

There are several news releases from the US this week, and many news releases from Europe and Asia. The US only has two high volatility news releases, while Europe has five high volatility news releases, and Asia has six high volatility news releases. Due to the current market conditions, markets from all three regions will probably continue experiencing high volatility and significant price movement throughout this week.

The US, European, and Asian news releases for this week are as follows (all times are Greenwich Mean Time, which is 2 hours behind Central European Time, and 4 hours ahead of US Eastern Time) :

US

• Monday : PMI Non Manufacturing at 2:00 PM
• Tuesday : No News Releases
• Wednesday : G8 Meeting at ??:?? ?? (Unknown Time), Oil Inventories at 2:30 PM, Central Bank Report at ??:?? ?? (Unknown Time), FOMC News Conference at 4:55 PM, and Consumer Credit at 7:00 PM
• Thursday : G8 Meeting at ??:?? ?? (Unknown Time), Unemployment Claims at 12:30 PM, FOMC News Conference at 1:00 PM, Wholesale Inventories at 2:00 PM, and Natural Gas Storage at 2:30 PM
• Friday : G8 Meeting at ??:?? ?? (Unknown Time), Trade Balance, and Import Prices at 12:30 PM, and Consumer Sentiment, and Inflation Expectations at 1:55 PM

• This week's US news releases that should cause high volatility are shown in bold type. There are several US news releases this week, but only two high volatility news releases. However, due to the current market conditions, the US markets will probably continue experiencing high volatility and significant price movement throughout this week.

Europe

• Monday : UK HPI at ??:?? ?? (Unknown Time), and EU Investor Confidence at 8:30 AM
• Tuesday : France Trade Balance at 6:45 AM, UK Manufacturing Production, and Industrial Production at 8:30 AM, Germany Factory Orders at 10:00 AM, and UK Consumer Confidence, Shop Price Index, and GDP at 11:01 PM
• Wednesday : Switzerland Unemployment Rate at 5:45 AM, G8 Meeting at ??:?? ?? (Unknown Time), EU GDP at 9:00 AM, and Germany Industrial Production at 10:00 AM
• Thursday : G8 Meeting at ??:?? ?? (Unknown Time), Germany CPI, and Trade Balance at 6:00 AM, EU Central Bank Bulletin at 8:00 AM, UK Trade Balance at 8:30 AM, UK Leading Index at 9:00 AM, UK MPC Rate at ??:?? ?? (Unknown Time), and UK Official Bank Rate at 9:00 AM
• Friday : G8 Meeting at ??:?? ?? (Unknown Time), Germany WPI at 6:00 AM, France Industrial Production, and Budget Balance at 6:45 AM, Italy Industrial Production at 8:00 AM, and UK PPI at 8:30 AM

• This week's European news releases that should cause high volatility are shown in bold type. There are many European news releases this week, and five high volatility news releases. Due to the current market conditions, the European markets will probably continue experiencing high volatility and significant price movement throughout this week.

Asia

• Monday : Australia Inflation Gauge at 12:00 AM, Australia Job Advertisements at 1:30 AM, Japan Leading Indicators at 5:00 AM, New Zealand Business Confidence at 10:00 PM, and Australia Construction Index at 11:30 PM
• Tuesday : Australia Cash Rate, and Central Bank Rate at 4:30 AM, and Japan Machinery Orders, Bank Lending, Current Account, and Money Stock at 11:50 PM
• Wednesday : Australia Consumer Sentiment at 1:00 AM, Australia Home Loans at 1:30 AM, Japan Economy Watchers' Sentiment at 5:00 AM, and G8 Meeting at ??:?? ?? (Unknown Time)
• Thursday : Australia Inflation Expectations at 1:00 AM, Australia Employment Change, and Unemployment Rate at 1:30 AM, G8 Meeting at ??:?? ?? (Unknown Time), Japan Machiner Tool Orders at 6:00 AM, and Japan CGPI at 11:50 PM
• Friday : G8 Meeting at ??:?? ?? (Unknown Time)

• This week's Asian news releases that should cause high volatility are shown in bold type. There are many Asian news releases this week, and six high volatility news releases. Due to the recent market conditions, the Asian markets will probably continue experiencing high volatility and significant price movement throughout this week.