Position delta
Definition · Level 5 · Greeks & volatility
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Net directional exposure of a whole position in share-equivalents: each option leg's delta × 100 × contracts (signed), plus shares held.
Example
Long 10 calls at 0.40 + short 5 puts at −0.30 = +550, like owning 550 shares.
Where Tradecraft teaches it
Level 5 · Greeks & volatility, in the lesson “Delta: direction, hedge ratio, share-equivalents”: How much your option moves per $1 in the stock — and how many shares you are really long.
Related terms
- 25-delta optionThe OTM call or put whose delta is ±0.25 — the standard reference strike for quoting skew; very roughly a 1-in-4 chance of finishing in the money.
- Dollar deltaShare-equivalent exposure multiplied by the underlying's price: how many dollars of stock the position behaves like.
- Hedge ratioUnits of the hedging instrument per unit of exposure: for options, delta × 100 shares per contract, traded the opposite way; for a cross-hedge, the…
- The GreeksThe standard set of option risk sensitivities, each named by a letter (vega is the invented one): delta to price, gamma to delta's change, theta to…
- Black–ScholesEuropean option-pricing model using spot, strike, time, rates, dividends and volatility; assumes lognormal prices, constant vol, no jumps and…
- Breakeven moveThe daily underlying move at which a delta-hedged option's gamma P&L just covers its time decay: √(2 × |daily theta $| ÷ position gamma).