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’.
We will learn more in this video.
We recommend reading this chapter on Varsity to learn more and understand the concepts in-depth.
Key takeaways from this chapter
- Option Greeks are forces that influence the premium of an option
- Delta is an Option Greek that captures the effect of the direction of the market
- Call option delta varies between 0 and 1; some traders prefer to use 0 to 100.
- Put option delta varies between -1 and 0 (-100 to 0)
- The negative delta value for a Put Option indicates that the option premium and underlying value move in the opposite direction
- ATM options have a delta of 0.5
- ITM option has a delta of close to 1
- OTM options have a delta of close to 0.
is another video coming in this module? One with the factors that influence delta movement?
Yeah, more coming out soon.
Explained very nicely. Waiting for the next video.
Will be up soon.
hi, is there a calculator for computing delta value of an option? can you mention it, if there is?
It’s called the Black & Scholes calculator. Do check here – https://web.sensibull.com
I don’t come from Maths backgroung. seems ‘Bahut dimag lagana padega ye seekhne ke liye’.
But we have tried to simplify it as much as possible 🙂
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!!
Mayank, the entire video series is out, check this – https://www.youtube.com/watch?v=-mO0YOTcCiQ&list=PLX2SHiKfualFiusiT9G5uE9jU3vetvW2x
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
You can add up the delta of all the positions, which will increase the deltas.