Option Delta Explained (Best Guide) | Option Greeks for Beginners

The delta of an option can be used to gauge the directional risk or exposure of an option relative to changes in the stock price.

In this video, you'll learn about the delta of an option through examples using real option data. More specifically, we'll talk about:

1. How an option's delta represents the option's expected price change relative to $1 changes in the stock price.

2. The difference between call and put option deltas.

3. How to use delta to gauge an option's directional risk exposure

4. The relationship between an option's strike price and delta.

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[mahmoudosmanactor]

By far, and I truly mean this - this is by far the best explanation of Delta that I have seen out there. The trouble with a lot of folks teaching these concepts is - a lot of it already makes sense to them, so they have a challenge breaking it down to its simple nature as beautifully as you did here. I said to myself, "Finally, someone who can explain it properly!" Many thanks for taking the time to create this.

[wigwuck]

Easily the best explanation I've seen anywhere. Thank you!

[ianh]

Wow. You made it so simple. Honestly ive been searching and searching for someone to break everything down. Thank you so much!

[mefunvdo]

Very good explanation! Nice tone and delivery!
Thanks.

[YourNewHomeExpert]

I just want to say you have the best option trading videos I refer everyone to your channel. thanks for everything

[tartarus]

Excellent video. I liked the study showing the underlying and options move, they were subtly not identical. I would love to see a volatility line imposed over that one, it might be very insightful.

[richardgordon]

That was an excellent (and very clear) presentation! I learned a lot. Thanks 😊

[erikung]

Thank you so much for taking the time and effort to put out this content!

[IvanVesely]

What's a long delta and short delta position please? Thank you.

[stanleysylvain]

Why is understanding delta important? I know it is, but I’m trying to understand why I have to either buy or not buy an option. When I look at the delta numbers, what about them that can help my decisions. Thanks.

[manoharkmanu]

Very well explained, you made it very simple to understand!

[richardgudino]

Thanks bro!! Super clear explanation. You have a new sub!

[opheliadaza]

Wow, the best and so clear explanation... thank you :) You gained a subscriber today 🎉💃🏼

[Lizestechreviews]

Maybe I’m overthinking this? But I use think or swim and it straight up tells you the percentage (meaning chance) the stock will expire in the money. Why would you need delta in that case next to that if they mean the same thing. Ex. Delta is .75 and the percentage of probability ITM is 75%. What other reasons would you need the delta??

[edmor]

Does the Delta stay constant over a long term leap say 2 years

[avinashthorat]

Thanks brother for detailed and simple explanation

[babyluvly]

So is it like a PIP? In forex ? But just stocks

[MC-gjfg]

I've often heard that selling options as close to .3 delta as possible is optimal. If the options chain offers us .25 and .35 as an example, is it better to go with the lower or higher delta? What factors work into that decision?

[g_mostella]

This maybe a stupid question but is the stock price the strike price ? Vice versa

[chrisg]

I see this holding true if ATM but what if you buy a call OTM or ITM, how will Delta against that?