Definitions for "DELTA NEUTRAL"
A strategy in which the Delta-adjusted values of the options (plus any position in the underlying) offset one another. In the goals tab of the Trade Finder, you can ask OptionVue 5 to scale recommended trades to help an existing position become Delta neutral at the current price of the underlying.
The value of the portfolio is not affected by changes in the value of the asset on which the options are written.
The term used to describe the situation where the net delta of a portfolio of options and futures is zero. Also known as Delta Hedged. Such a position means that there is no exposure to directional movements in the underlying. Note however, that this does not mean that there is no risk attached to such a position. Option deltas change for a variety of reasons, and so the portfolio must be constantly readjusted in order to maintain a delta neutral position.
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