# A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A measurement of the change in the price of an option resulting from a change in the price of the underlying security.

Delta is positive for calls and negative for puts.

Delta can be calculated as the dollar change of the option that an investor can expect for a one-dollar change in the underlying security. For example, let's say an option on a stock trading at $50 costs $1 and has a delta of $0.50 per dollar of underlying stock price change. If the stock price rises to $52, the price of the option will increase by $1 (the $2 price change times the $0.50 delta). After the stock price movement, the option will be worth $2 ($1 initial cost plus $1 delta).

Delta can also be calculated as a percentage change in the option price for a one-percent change in the underlying security; this method of viewing the delta value is also known as leverage.

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