Module 5   Introduction to Options Trading (Video Series)Chapter 7

# The Option Greeks – Delta

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### 7.1 – Delta of an Option

For an options trade to be successful in the market, several forces need to work in the option trader’s favour. These forces are collectively called ‘The Options Greeks’.

### Key takeaways from this chapter

1. Option Greeks are forces that influence the premium of an option
2. Delta is an Option Greek that captures the effect of the direction of the market
3. Call option delta varies between 0 and 1; some traders prefer to use 0 to 100.
4. Put option delta varies between -1 and 0 (-100 to 0)
5. The negative delta value for a Put Option indicates that the option premium and underlying value move in the opposite direction
6. ATM options have a delta of 0.5
7. ITM option has a delta of close to 1
8. OTM options have a delta of close to 0.

1. Ashwin says:

is another video coming in this module? One with the factors that influence delta movement?

• Karthik Rangappa says:

Yeah, more coming out soon.

2. SUBIR KUMAR DAS says:

Explained very nicely. Waiting for the next video.

• Karthik Rangappa says:

Will be up soon.

3. himanshu says:

hi, is there a calculator for computing delta value of an option? can you mention it, if there is?

4. Prashant Chaudhary says:

I don’t come from Maths backgroung. seems ‘Bahut dimag lagana padega ye seekhne ke liye’.

• Karthik Rangappa says:

But we have tried to simplify it as much as possible 🙂

5. mayank says:

when this videos coming karthik eagerly waiting! I appreciate your hard work, may god doesn’t give what you want! & gives you what you haven’t dreamt off!!

6. PRASANTA says:

During put option delta explanation it says that put option delta is .2 , First of this video indicates that put option delta is -1 to 0. its not clear how put option delta become +.2 . Thanks

• Karthik Rangappa says:

You can add up the delta of all the positions, which will increase the deltas.

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