Delta 101: Understanding Options Trading
Delta, the second Greek letter in options trading, quantifies the change in option price relative to the underlying equity's market value.
The delta of an option is a mathematical function representing how much its value changes based on the underlying equity's fluctuations.
Derived from the Greek word "deltos," delta measures the change in an option contract's price in reaction to a $1 move in the underlying asset.
Delta's value depends on how far an option contract is from being at-the-money, where the strike price equals or is near the underlying security's market price.
Author's summary: Exploring delta in options trading.
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