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What does the term delta mean?What does the term delta mean? It is a ratio comparing the change in the price of the underlying stock to the change in the price of a derivative.For example, if the delta of a Call option is 70, it means that for every $1 the underlying stock increases, the expected movement of the option would be a .70 or 70%. Deltas for Put options are negative percentages because their price movement is in the opposite direction of the underlying stock. Before buying an option you need to check the delta. If the delta is too low, the underlying stock might not have enough price movement for you to profit from the trade.
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