have any of you used delta netural trading example --
owning 100 shares of stock , selling 2- 50 delta calls , then letting time expire .
Results 1 to 4 of 4
delta netural trading
have any of you used delta netural trading example --
owning 100 shares of stock , selling 2- 50 delta calls , then letting time expire .
How is that Delta neutral?
Sounds like you just described selling covered calls.
The term "Delta Neutral" refers to any strategy where the sum of your deltas is equal to zero. Calls have positive Delta and Puts have negative Delta.
A share of stock, by definition, has a delta of 1. If you own 100 shares of stock and sell 2 at-the-money calls that have a delta of .50 (i.e. 50 per contract), yes you've created a basic delta neutral trade. The problem is your trade won't remain delta neutral if the stock moves in either direction away from the strike price.
