Concept of the Day:Delta (Δ)

Delta measures the sensitivity of an option's price to changes in the price of the underlying asset. It indicates how much the price of an option will move for every ₹1 change in the price of the asset.

Call Option Delta: Ranges from 0 to +1. For example, a Delta of 0.5 means the call price will increase by ₹0.50 for every ₹1 increase in the asset's price.

Put Option Delta: Ranges from 0 to -1. A Delta of -0.5 means the put price will increase by ₹0.50 for every ₹1 drop in the price of the asset.

Delta can also be thought of as the probability of the option expiring in-the-money. A Delta of 0.8 suggests an 80% chance that the option will end up in-the-money at expiration.

Note that delta is a continually changing variable.

Disclaimer: This information is for educational purposes only. Trading in Futures and Options involves substantial risk and is unsuitable for all investors. Past performance is not indicative of future results. Consult a financial advisor before engaging in such trading activities.