Delta (Financial)

In finance, Delta measures how much the value of an options contract is expected to change for a $1 change in the price of the underlying asset, like a stock. It is expressed as a number between 0 and 1 for calls (or 0 and -1 for puts), indicating the option’s sensitivity to the stock's movements. For example, a Delta of 0.5 means the option's price will increase by roughly $0.50 if the stock rises $1. Understanding Delta helps investors assess potential profits and manage risk in options trading.