Cryptocurrency Q&A
Why is the Delta of a put option negative?
Why is the Delta of a put option negative?
Lucia
Fri Sep 27 2024
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6 answers
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Could you please explain to me why the Delta of a put option is inherently negative? Is it due to the nature of the put option contract itself, or is there another reason behind this phenomenon? How does this negative Delta affect the pricing and risk management of put options in the market? I'm particularly interested in understanding the dynamics at play and how they relate to the broader context of options trading and cryptocurrency markets.
6 answers
ShintoMystic
Sun Sep 29 2024
The delta of a put option represents its sensitivity to changes in the underlying asset's price.
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RobertJohnson
Sun Sep 29 2024
For put options, the delta is negative, indicating that as the stock price rises, the value of the put option decreases.
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benjamin_brown_entrepreneur
Sun Sep 29 2024
Conversely, for call options, the delta is positive, signifying that as the stock price increases, so does the value of the call option.
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Filippo
Sun Sep 29 2024
The delta of a call option ranges between 0 and 1, reflecting its partial ownership of the underlying asset.
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Lorenzo
Sat Sep 28 2024
For put options, the delta falls within the range of -1 to 0, reflecting the potential for profit through a decrease in the stock price.
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