{"id":38362,"date":"2015-07-19T16:03:04","date_gmt":"2015-07-19T10:33:04","guid":{"rendered":"http:\/\/vskills.in\/certification\/blog\/?p=38362"},"modified":"2024-04-03T13:19:14","modified_gmt":"2024-04-03T07:49:14","slug":"option-greeks-delta1","status":"publish","type":"post","link":"https:\/\/www.vskills.in\/certification\/blog\/option-greeks-delta1\/","title":{"rendered":"Option Greeks- Delta(1)"},"content":{"rendered":"

\"Option<\/a><\/p>\n

When we start with Option Greeks, we talk about the delta first. The delta is one of the fundamental elements of Options Theory.
\nThe delta is a Greek alphabet, and its sign is \u0394. The delta is used to measure the change in the option price with regards to the underlying. I think that puts it as simply as it can be put. Thus as we have already covered that the delta is measure of the rate of change in premiums in relation to the underlying, we must also be comfortable with the fact that it is represented as a ratio(or percentage), and that I should range between -1 and 1 only. This shall be explained in further discussions, but it must be kept in mind at all times.
\nNow, let us take an example. Suppose a call option has the delta of .4, Strike 8400, and market level is 8500. This means that when the market moves hundred points to 8500, the option premium, which was, say Rs. 12 earlier, will increase by Rs. 40 (100*.4) and become Rs. 52. This is the practical implication of delta. Now, suppose a put option of strike 8400, market level 8500, delta (-)0.4 and premium Rs. 15. Now, if the market were to lose another hundred points, and dive to 8400, the premium would increase by Rs. 40(100*.4), and become Rs. 55. This is the basic use of delta. The reason why call options and put options have different signs, is the matter of another discussion.
\nIn the upcoming discussions, we shall discuss delta in much more detail, understand the association with call and put options, and it\u2019s use, some basic market strategies, et al.<\/p>\n

Click here for government certification in Accounting, Banking & Finance<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

When we start with Option Greeks, we talk about the delta first. The delta is one of the fundamental elements of Options Theory. The delta is a Greek alphabet, and its sign is \u0394. The delta is used to measure the change in the option price with regards to the underlying. I think that puts…<\/p>\n","protected":false},"author":1109,"featured_media":38495,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_joinchat":[],"footnotes":""},"categories":[1519],"tags":[2044,1037,4134,2718,1760],"class_list":["post-38362","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting-banking-and-finance","tag-derivatives","tag-finance","tag-greeks","tag-options","tag-stock-markets"],"acf":[],"yoast_head":"\nOption Greeks- Delta(1) - Vskills Blog<\/title>\n<meta name=\"description\" content=\"Introductory article about Option Greeks. 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