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 difference.
It is a mathematical function of the market value of the underlying equity, representing how much an option's value changes based on the underlying equity's changes.
Derived from the Greek word "deltos," delta determines the change in the price of an option contract in reaction to a $1 move in the underlying asset.
Delta depends on how far an option contract's value is from being at-the-money, where the strike price equals or is near the market price of the underlying security.
Author's summary: Exploring delta in options trading.