delta
/ˈdɛltə/
the rate of change in an option's price relative to a $1 move in the underlying asset
delta in a sentence
“The call option had a delta of 0.60, meaning it would gain $0.60 for every $1 the stock rose.”
Origin of delta
Greek letter Δ (delta), used in mathematics to denote change or difference
Related Words
theta
the rate at which an option loses value each day due to the passage of time; time decay
hedge
an investment made to reduce the risk of adverse price movements in an asset
futures contract
an agreement to buy or sell an asset at a predetermined price on a specific future date
leverage
the use of borrowed capital to amplify potential returns — and potential losses
call option
a contract giving the buyer the right, but not obligation, to purchase shares at a set price before expiration
put option
a contract giving the buyer the right, but not obligation, to sell shares at a set price before expiration