Saturday, March 21, 2020

Vertical Spread and Deltas































RECAP about DELTA.
  • Positions with positive delta increase in value if the underlying goes up
  • Positions with negative delta increase in value if the underlying goes down
  • An option contract with a delta of 0.50 is theoretically equivalent to holding 50 shares of stock
  • 100 shares of stock is theoretically equivalent to an option contract with a 1.00 delta