Meet the Option Greeks - Delta ▲
Delta is an option Greek that measures the rate of change in the price of an option relative to a change in the underlying asset price. It can be thought of as the probability that the option will expire in-the-money.
Delta is calculated using mathematical models such as the Black-Scholes model, which considers various factors such as the underlying asset price, time to expiration, volatility, and interest rates. The delta of a call option is usually between 0 and 1, and the delta of a put option is usually between -1 and 0. The delta value indicates the expected change in the option price given a $1 change in the underlying asset price.
For example, if a call option has a delta of 0.75, it means that if the underlying asset price increases by $1, the option price is expected to increase by $0.75. Similarly, if a put option has a delta of -0.25, it means that if the underlying asset price decreases by $1, the option price is expected to increase by $0.25.
Delta is calculated using mathematical models such as the Black-Scholes model, which considers various factors such as the underlying asset price, time to expiration, volatility, and interest rates. The delta of a call option is usually between 0 and 1, and the delta of a put option is usually between -1 and 0. The delta value indicates the expected change in the option price given a $1 change in the underlying asset price.
For example, if a call option has a delta of 0.75, it means that if the underlying asset price increases by $1, the option price is expected to increase by $0.75. Similarly, if a put option has a delta of -0.25, it means that if the underlying asset price decreases by $1, the option price is expected to increase by $0.25.
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