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What is Delta?

Best Practices

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

After learning pricing conventions and contract specifications, an important next step when learning to trade is understanding the option Greeks. The option Greeks provide key insight into how option prices change, one of the most important being Delta. Delta is the option Greek that explains how an option’s price changes with respect to the underlying asset’s price.

In this Best Practices, Tom and Tony break down Delta, its multiple interpretations, and how it’s used to construct a successful portfolio.

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