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The ratio of the change in price of an option to the change in price of the underlying asset. Also called the hedge ratio. Applies to derivative products. For a call option on a stock, a delta of 0.50 means that for every $1.00 that the stock goes up, the option price rises by $0.50. As options near expiration, in-the-money call option contracts approach a delta of 1.0, while in-the-money put options approach a delta of -1. See: hedge ratio, neutral hedge. Call deltas range from 0.00 to +1.00; put deltas range from 0.00 to -1.00. If the call delta is 0.69, the put delta is -0.31 (call delta minus 1 equals put delta; 0.69 -1 =-0.31).
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


The change in the price of an option that results from a one-point change in the price of the underlying stock. For example, a delta of 0.5 indicates that the option will rise in price by 1/2 point (50¢) for each 1-point ($1) rise in the price of the underlying stock. Call options have positive deltas; put options have negative deltas.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


The relationship between an option's price and the price of the underlying stock or futures contract is called its delta.

If the delta is 1, for example, the relationship of the prices is 1 to 1. That means there's a $1 change in the option price for every $1 change in the price of the underlying instrument.

With a call option, an increase in the price of an underlying instrument typically results in an increase in the price of the option. An increase in a put option's price is usually triggered by a decrease in the price of the underlying instrument, since investors buy put options expecting its price to fall.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.
References in periodicals archive ?
It added: "Following a period of engagement and due diligence, the board has concluded that a transaction with Deltic would not be in the best interests of the company's shareholders.
Expert vehicle technician Raymond Batchelor preparing Iconic 1960's Deltic locomotive 'King's Own Yorkshire Light Infantry' (KOYLI), at the National Railway Museum at Shildon, County Durham, ahead of it's important role alongside steam legend Flying Scotsman in the museum's ground breaking 'Stunts, Speed and Style' display, which will take place at its York site in March 2016 and form part of its highly anticipated Scotsman Season
Last week, the companies announced a $1.2 billion all-stock deal that will give Deltic shareholders 1.8 Potlatch shares for every Deltic share, a roughly 7 percent premium for Deltic shareholders.
It is thought that Deltic will again push for an all-paper tie-up which would see Revolution own 65% of a combined entity and Deltic the remaining 35%, creating a bar giant with annual sales of more than PS270 million.
A natural resources company, Deltic Timber owns 530,000 acres and manages timberland.
Earlier, the Deltic had hauled the train from Shildon into Eaglescliffe, where it sat for a while before heading back out the other way towards York.
He said: "The Royal Scots Grey 'Deltic' diesel was used to carry passengers from Birmingham to Ramsgate last summer.
The Ashton-under-Lyne headquartered company, which was last year the subject of a takeover tussle between rivals Deltic and Stonegate, said revenue for the 26 weeks to December 30 rose 10.6% to PS73.7m.
NIGHTCLUB owner Deltic Group has revealed it has its eye on Newcastle as part of expansion plans in the wake of its failed merger attempt with Revolution Bars.
Deltic is proposing an all-paper merger that would see embattled Revolution own 65 per cent of the combined business and Deltic the remaining 35 per cent.
Dillon, who was 60 when Deltic's annual proxy statement was issued in March, has been CEO of Deltic since 2003, when he was hired away from Gaylord Container Corp.
Deltic Timber Corporation (NYSE:DEL) revealed on Monday that its board of directors approved a quarterly dividend of USD0.100 per share.