Understanding Delta in Options Trading
Delta, the second Greek letter used in options trading, represents the change in option price relative to the difference in the underlying equity.
The delta of an option is a mathematical function of the market value of the underlying equity, quantitatively representing how much an option's value will change based on changes in the underlying equity.
Derived from the Greek word "deltos," delta is a mathematical measure that determines the change in the price of an option contract in reaction to a $1 move in the underlying asset.
Delta is dependent upon how far away an option contract's value is from being at-the-money, which occurs when a call or put option's strike price is equal to or very near the market price of the underlying security.
Author's summary: Delta measures option price changes.