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.
An options strategy designed so that the position is insensitive to movements in the underlying security. It can be composed of options/options or options/ underlying security. It is a careful calculation of offsetting long and short positions.
Occurs when the market risk exposure, in terms of price or interest rate level, for an underlying position is completely offset with derivatives. This is a point in time concept because options are decaying assets that may have to be rebalanced in order to maintain delta neutrality.
a position for an options portfolio such that the overall delta of the portfolio is zero.
A position arranged by selecting a calculated ratio of short and long positions that balance out to an overall position delta of zero.
A position where the sum of the deltas of the component legs adds up to 0.
This is an "options/options" or "options/underlying instrument" position constructed so that it is relatively insensitive to the price movement of the underlying instruments. This is arranged by selecting a calculated ratio of offsetting short and long positions.
Refers to a position involving options that is designed to have an overall delta of zero.
Having no delta exposure.
In Finance, a portfolio containing options is Delta neutral when it consists of positions with offsetting positive and negative deltas (exposure to changes in the value of the underlying instrument), and these balance out to bring the net delta of the portfolio to zero.