Deep Dive Into OPTION DELTA: What You MUST Know! (ThinkOrSwim Demo Included!)

The most significant of the option "Greeks" is Delta. This is due to the fact that misunderstanding Delta and not knowing how to properly use it can lead to catastrophic losses, particularly if you sell naked options like I do. Join me in this video as I explain in great detail the crucial aspects of option Delta that you MUST understand if you want to be a successful options trader. I will also provide thorough examples in my ThinkOrSwim trading platform so that you can walk away from this video with a solid understanding!

JOIN ME ON SKILLSHARE TOO!!!
*** Signing up for a Premium Skillshare membership with any of the links provided below will give you a 2 week FREE trial! ***

#optionstrading #optiongreeks #tradinglessons

[scottreesetradinginvesting]

Delta is one of the most important concepts to understand when it comes to options trading...so pay attention! Happy to answer any and all questions!

[cathya]

Simply put one of the best explanations I have seen in a while, the way you make the information come across is amazing, great video Thank you !!

[cryptocomplete]

I have watched a 100 of hours of videos on options trading and never heard anyone describe delta as representing a theoretical number of shares at risk. I had to watch this several times to try to wrap my head around this viewpoint. Not sure if I am just dense or what, but I still don't really get why this is a useful way to look at delta, rather than the simple direct explanation that Delta is the amount an option will change if the share price changes by $1. Is it so that you can get a more visceral understanding of your instantaneous risk and how much money you might lose at any given moment? (in contrast to just looking at "delta" itself which is an esoteric theoretical value of change?)

[galph]

How can I find the Delta of the contract when I purchased it if I didn't take more of it?

[cknight]

Great content! It's been said on several videos out on YouTube that Delta also approximates the probability of the option becoming ITM at a particular strike. What the option chain showed in your example was this is true to a large degree. It seemed the call side probability of expiring ITM was as follows: Probability =~ Delta - (2% to 14%) and for the put side the probability of expiring ITM was Probability =~ Delta + (2% to 14%). Question: Do you take into account this probability given in the options chain as well? If not, does it (the ITM probability) really have much relevance? Just something I noticed and am kind of curious if you factor that in. I'm still new to options and thankfully haven't lost anything (like my entire portfolio) yet.