Delta

Also called the hedge ratio, the ratio of the change in price of a call option to the change in price of the underlying stock. The New York Times Financial Glossary

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delta del‧ta [ˈdeltə] noun [countable usually singular]
1. STATISTICS a change in an amount
2. FINANCE the relationship between a change in price of an option (= right to buy or sell shares etc ) to the change in price of the underlying

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   A measure of sensitivity derived from an option pricing model. It measures how much an option's price will change for one unit of change in the underlying price.
   ► See also Option.

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delta UK US /ˈdeltə/ noun [S]
GRAPHS & CHARTS a change in a figure or amount
FINANCE the measurement of how the price of an option changes compared to the price of the shares, etc. that it is based on: »

A delta of 0.5 means that for every $1.00 that the stock goes up, the option price rises by $0.50.


Financial and business terms. 2012.

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