Position Greeks for multi-leg strategies

Stacking Greeks across legs

Up to this point, we've looked at Greeks on a single option. Real trading rarely stays that simple. Iron condors, butterflies, verticals, calendars — these multi-leg structures have legs that work together. To understand the risk of the whole structure, you sum the Greeks across all legs. That sum is called your 'position Greeks.'

The math is straightforward addition. If leg 1 has delta +0.30 (you're long a 0.30-delta call), and leg 2 has delta -0.15 (you're long a put with -0.15 delta), your net position delta is +0.15. Same for every other Greek. Long legs contribute their Greek as-is. Short legs contribute the negative — if you sold a 0.40-delta call, your contribution is -0.40 to the position delta.

Let's walk through the classic example: the iron condor. You sell a call spread above the stock and a put spread below it. Four legs total. Short OTM call, long further-OTM call (to cap risk), short OTM put, long further-OTM put. Net delta is close to zero — the trade is direction-neutral. You're betting the stock stays in a range.

Now sum the other Greeks. Theta: you sold two options and bought two; the short options have bigger theta (they're closer to ATM), so net theta is positive. You collect time decay every day the stock stays in range. Gamma: same logic in reverse. The short legs have bigger gamma, and shorts contribute negative gamma. Net gamma is negative. A big move in either direction hurts. Vega: same again. Net vega is negative. If implied vol spikes, you lose.

So the iron condor's signature is: positive theta, negative gamma, negative vega, near-zero delta. That tells you exactly what you're rooting for. You want the clock to tick, the stock to stay calm, and implied vol to drift lower. If any of those goes wrong, your position bleeds. Every multi-leg structure has its own signature — calendar spreads (positive vega + positive theta over time), short straddles (extreme negative gamma + negative vega + positive theta), butterflies (concentrated negative gamma near the body).

Recap: position Greeks = sum across legs (with sign for long/short). Iron condor = +theta / -gamma / -vega / ~0 delta. Read your position by its Greek signature.