Delta

[admin]

Delta is an estimate of how much an option’s price may change with a $1 change in the underlying security’s price.The Delta value can be either positive or negative depending on the type of option. For call options, it always ranges from 0 to 1. For put options, it always ranges from -1 to 0.For example, if a call option has a Delta of .50, and the underlying stock increases in price by $1 per share, then the option price will increase by $0.50 per share. If a put option has a Delta that is -.50, and the underlying stock increases in price by $1 per share, then the option price will decrease by $0.50 per share.Another thing to note about Delta is that its behavior depends on whether an option is “in-the-money,” “at-the-money,” or “out-of-the-money.”