What is the approximate Delta value for a deep in-the-money call option? Option: Between 0.45 and 0.3, Between 0.45 and 0.55, Between 0.3 and 0, Between 0.8 and 1

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The Delta of an option represents the sensitivity of its price to changes in the underlying asset's price. A Delta of 1 indicates a perfect correlation between the option's and the underlying's price movements. Deep in-the-money call options have a Delta approaching 1 because their value is highly sensitive to changes in the underlying asset's price. Therefore, the approximate Delta value for a deep in-the-money call option is **between 0.8 and 1**. **Key SEO Keywords:** Delta, Options Trading, In-the-Money Call Option, Option Greeks

What is the approximate Delta value for a deep in-the-money call option?

"Delta" in options trading quantifies the price sensitivity of an option to changes in the underlying asset's price. A Delta of 0.5, also known as "at-the-money," signifies that for every $1 change in the underlying asset's price, the option's price is expected to move by $0.50. This indicates that the option's strike price is very close to the current market price of the underlying asset.

What does a Delta of 0.5 signify for a call option?

"Delta, a key concept in options trading, measures an option's price sensitivity to changes in the underlying asset's price. Expressed as a ratio, Delta ranges from -1 to +1 for put options and 0 to +1 for call options. A Delta of 0.5 means the option's price will theoretically move by $0.50 for every $1 change in the underlying asset. Traders use Delta to understand potential profit/loss scenarios and manage risk in their portfolios."

What is the typical range for the Delta of a call option?

"Delta" in options trading quantifies an option contract's price sensitivity to changes in the underlying asset's price. A delta of 0.5 means the option's price will theoretically move by $0.50 for every $1 change in the underlying asset. **Key SEO keywords:** Options Trading, Delta, Option Greeks, Option Pricing, Underlying Asset, Option Premium.

What does the 'Delta' of an option represent?

The sensitivity of the option's price to changes in implied volatility.

The change in the option's premium for a given change in the underlying asset's price.

The rate of change of the option's price over time.

The probability of the option expiring in-the-money.

"Delta" in options trading quantifies the price sensitivity of an option to changes in the underlying asset's price. A delta of 0.7, often referred to as a "70 delta," signifies that the option's price is expected to increase by 0.7 points for every 1 point increase in the underlying asset's price, assuming all other factors remain constant. This concept is crucial for understanding option pricing dynamics and hedging strategies.

What does a delta of 0.7 for a call option indicate?

The option has a 30% chance of expiring out of the money.

The option price will increase by 0.7 points for every 1 point increase in the underlying asset price.

The option has a 70% chance of expiring in the money.

The option price will decrease by 0.7 points for every 1 point increase in the underlying asset price.

The delta value of an at-the-money (ATM) option is **0.5**. Delta, a key concept in options trading, represents the sensitivity of an option's price to changes in the underlying asset's price. An ATM option has a delta of 0.5, implying that for every $1 move in the underlying asset, the option's price is expected to change by approximately $0.50. This concept is crucial for understanding option pricing and hedging strategies.

What is the delta value of an at-the-money (ATM) option?