a question about delta?

cashclay · Jan 20, 2016

Does the delta fluctuate or does it remain the same number at the time of ur purchase? For ex: when i purchase CHK put option at -.77 delta is it going to be that number for me until i sell or will it follow the current delta? Cuz if it follows the current trend then how would that make delta an important factor to consider when purchasing an option; considering it has the possibilty of being rendered useless?

lindq · Jan 20, 2016

Delta will fluctuate with price. But that doesn't preclude the advantage of entering a trade with delta in your favor.

cashclay · Jan 20, 2016

thank you. yes im talking to an options trader about now lol. he was telling becuase the price is moving when you enter it should follow the delta that u currently bought in at before it begins to change. so buyin into a high delta and then having the stock go ur way could at the beginning greatly increase ur profit.

Jones75 · Jan 20, 2016

Maybe raise the bar for yourself, and investigate some delta neutral strategies.

VTS · Jan 21, 2016

All greeks and IV readings are just a snapshot in time, changing constantly. So it's a good idea to understand what they all mean and how they are all related to each other so you can not only enter good trades but manage them effectively as well.

Given your question, I don't think it would be a bad idea to just paper trade until you've got a few solid months of studying the options market under your belt. Good luck

Zestilio · Jan 21, 2016

I think the market is wrong and this stock will rally

cashclay · Jan 21, 2016

yeah i think it will too just not right now. I think maybe oil could start rebounding sometime next month but my put option which i bought for only a two week time was for that reason. CHK generally moves in the direction of the oil market more so than other energy stocks.

lawrence-lugar · Jan 21, 2016

Zestilio said:
I think the market is wrong and this stock will rally

...I've never liked people with Z names :vomit:

Zestilio · Jan 22, 2016

lawrence-lugar said:
...I've never liked people with Z names

you do really think it's a real name?

J_Smith · Jan 22, 2016

VTS said:
All greeks and IV readings are just a snapshot in time, changing constantly. So it's a good idea to understand what they all mean and how they are all related to each other so you can not only enter good trades but manage them effectively as well.

Given your question, I don't think it would be a bad idea to just paper trade until you've got a few solid months of studying the options market under your belt. Good luck

It all depends on what, and how, you trade.

I use options to daytrade some stocks and ETF's, as well as some short term trades on ES and Crude Oil.

The only greeks I use are Delta and Theta.

You won't be long learning when you see the bid-ask widen and the option price suddenly stop moving much after the underlying makes a sudden fast move against you!

Picking the correct strike is very important for daytrading, and the spread should be your first consideration, with Delta second - no good trying to buy and sell something if you have to pay a heap of money for the privilege, much better to trade lower size in the underlying.

J_S