Delta definition

A - B - C - D - E - F - G - H - I - L - M - N - O - P - Q - R - S - T - U - V - W - Y

See all glossary trading terms

A derivative’s delta is defined as its price movement in relation to the change in price of its underlying asset. It can also sometimes be referred to as a hedge ratio, and is most often used when dealing in options.

Delta is given as the amount an option’s price will move when its underlying asset changes one point in price. A delta of 0.5, for instance, will see the price of an option move 0.5 for every one point move of its asset. A delta of one means that the option will mirror the price changes of its underlying asset. A put option’s delta has a value in the range 0 to -1 and a call option’s in the range of 0 to 1.

Depending on whether the derivative is a call or a put, delta can be either shown as a negative or a positive figure. This is because a put option, for example, will have a price that moves inversely to the price of its underlying asset.

Delta is one of the ‘greeks’: a set of variables of risk involved in options trading.

Visit our options trading page

Find out more about options trading.

Help and support

Get answers about your account or our services.

Get answers

Or ask about opening an account on 0800 195 3100 or newaccounts.uk@ig.com.

We're here 24hrs a day from 8am Saturday to 10pm Friday.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.