The option's delta is approximately the change in the option price for a change in the stock price.

Question

Quizplus · Accepted Answer

This statement is true. Delta measures the sensitivity of an option price to changes in the underlying stock price. A delta of 1 means that for every $1 change in the stock price, the option price will change by approximately $1. A delta of 0.5 means that for every $1 change in the stock price, the option price will change by approximately $0.50.

The Option's Delta Is Approximately the Change in the Option