Delta question on puts
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Well you do not need to ignore it just understand what it means.
Delta is based on the underlying stock price moving up by $1.00. Therefore calls have positive delta and puts negative delta. If the basis of analysis was stock moving DOWN $1.00 then puts would be + and calls would be - but since the frame of reference is if the stock moves up $1.00 that is where the +/- signs come from.
So if you are long puts it is confusing that to measure change you have to change the negative to a positive in your mind to see true delta change in your option for $1.00 decrease in underlying hold all things constant. But it just involves reversing your thinking when it comes to puts.
The more you look at greeks the easier it is to deal with the +/- signs with puts based on your position.
Delta is based on the underlying stock price moving up by $1.00. Therefore calls have positive delta and puts negative delta. If the basis of analysis was stock moving DOWN $1.00 then puts would be + and calls would be - but since the frame of reference is if the stock moves up $1.00 that is where the +/- signs come from.
So if you are long puts it is confusing that to measure change you have to change the negative to a positive in your mind to see true delta change in your option for $1.00 decrease in underlying hold all things constant. But it just involves reversing your thinking when it comes to puts.
The more you look at greeks the easier it is to deal with the +/- signs with puts based on your position.
With all due respect, coach...
Most ordinary investors can safely ignore the minus sign in front of put deltas.
If you're computing the net delta of a many-legged position, it's important to get the signs right. If you're trading long/naked puts or simple combos, don't bother. Focus on the magnitude of the number.
You already know puts go up when stocks go down, and that's all the minus sign means anyway.
Most ordinary investors can safely ignore the minus sign in front of put deltas.
If you're computing the net delta of a many-legged position, it's important to get the signs right. If you're trading long/naked puts or simple combos, don't bother. Focus on the magnitude of the number.
You already know puts go up when stocks go down, and that's all the minus sign means anyway.