Skip to Content
Opening Bell
Back to Glossary

Delta

Options

Delta shows roughly how much an option's premium changes when the stock moves $1.

It ranges from 0 to 1 for calls and from 0 to -1 for puts, and at-the-money options have a delta of around 0.5. As a rough rule of thumb, it is also read as an approximate probability that the option finishes in the money.

Example

For a call with a delta of 0.40, a $1 rise in the stock lifts the premium by about $0.40, or about $40 for a 100-share contract.

Related Terms

2 Links

More in the Guide

Options: Calls, Puts and the Anatomy of a PremiumA way to trade direction without owning the stock — and why the clock inside the premium always runs against the buyer.