The Delta

Delta, in finance, measures how much the price of an option is expected to change for a $1 move in the underlying asset's price. For example, a delta of 0.5 means that if the stock price increases by $1, the option's price is expected to rise by $0.50. Delta ranges from 0 to 1 for call options and 0 to -1 for put options. It helps investors understand the option's sensitivity to market movements and can be used to gauge risk and manage hedging strategies accordingly.