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Stocks & Commodities V. 34:03 (42–43, 46): Explore Your Options by Tom Gentile

Stocks & Commodities V. 34:03 (42–43, 46): Explore Your Options by Tom Gentile

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Explore Your Options by Tom Gentile

MONEYNESS AND THE MATH OF OPTIONS

How can you tell how much your option will move if the stock moves by a certain amount?

This is a popular question and my answer, in a nutshell, is You can figure it out using a formula. The formula is used to calculate that one number, which is known as the delta. As you may know, delta is one of the option greeks that help make up an options premium or value. It is considered by many to be the most important greek, or component of an option...
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