Options Delta Explained

Options Delta Explained
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The Greeks: 0:00
What Is Delta? 1:33
Things You Need To Know: 6:03

Option prices are influenced by what is known as "The Greeks." They are:
- Delta: measures how much the option price change if the stock moves $1.
- Gamma: Rate of change of the Delta.
- Theta: measures time decay.
These are just a few examples, but there are more.

For right now I am going to focus on Delta.

Delta is a number between 0-1 that measures how much the price of an option changes if the stock moves by $1.

Let's use this example from MSFT trading at $211.20:
Strike Price Delta Current Price New Price
----------------- -------- --------------------- ----------------
205 (ITM) 0.8 6.92 7.72
210 (ATM) 0.57 3.05 3.62
215 (OTM) 0.27 1.06 1.33

Things You need to know:
- Options that are ITM have a higher delta than options OTM
- Options that are ITM are more expensive
- Options ATM are usually around 0.5
- Put Options have a negative delta -1 & 0
- Rough estimate of the probability of the stock price closing above the strike price.
- Delta is not fixed: Changes as the price changes.

The Options Wheel Strategy: https://www.youtube.com/playlist?list=PLBa3sAx-Io2nosgosERUhIZwzvIgD-3Vq

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Видео Options Delta Explained канала Markus Heitkoetter