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The delta of an option can be used to gauge the directional risk or exposure of an option relative to changes in the stock price.
In this video, you’ll learn about the delta of an option through examples using real option data. More specifically, we’ll talk about:
1. How an option’s delta represents the option’s expected price change relative to $1 changes in the stock price.
2. The difference between call and put option deltas.
3. How to use delta to gauge an option’s directional risk exposure
4. The relationship between an option’s strike price and delta.
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