7 Common Trading Terms and Definitions

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3. Delta value

Delta value shows the amount of the option price will change when the security price changes by $1.00. It is a positive value for the call option and a negative value for a put option. It ranges from 0.1 to 1.0. Delta value in the money option is more than 0.5 and out of the month key, the option is less than 0.5. Delta value for deep in the money option usually is more than 0.9. If the option delta value is 0.6, meaning that when the security price goes up to $1, the option price will go up to $0.60. If the security price goes up to $0.10, the option price will go up to $0.06. Usually, $0.06 will round up to $0.10.

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