Option Question about Delta

A KO doesn't abrogate the point that sle and marti have made. You keep editing your posts, not me.

 

Quote me, you be safer.

 

An answer ? Maybe not.

 

You can call every friend you got : a delta is not a probability. Is it clear ?

 

Whoever confuses delta with the above prob, partioularly for ATM strike, is probably an idiot. However the more one gets away from ATM strike, the less is the difference between the two. The fact that options have the highest prioce for ATM strike, may be viewed as loud reflection of "the difference between delta and prob is highest ATM". Yet the idiots who write books take the worse case approximation to wrongly equate the two.

I have explained the analytical/intuitive underpinnings of the difference between the two in a blog post somewhere.

 

+1

 

Let's extend this. How about "Whoever believes BS delta is a usable hedge rato is probably an idiot"?

 

No !

 

All delta means is the amount the price of the option will change in value for every point the underlying stock moves. Delta is highest at the money and lowest out of the money. Gamma is how much the delta will change if the uderlying stock moved a pt.

 

Here Here......Agreed...Re read options 101 for that one....