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The crucial role of delta in options trading

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Without at least a basic understanding of options delta, nobody should venture into the world of  options trading . Delta, one of the so-called Options Greeks, plays such a vital role both in options pricing that without understanding how it works, most traders are bound to make costly mistakes. Definition In laymen’s terms one can simply define delta as the amount an option would move in response to a $1 movement in the price of the underlying asset (stock, currency, commodity). How delta works An option with a delta approaching 1 (e.g. deep in the money options) would move $1 for every $1 movement in the price of the underlying asset. For call options delta is positive, i.e. the value of the option increases when the price of the underlying asset increases and decreases when this price drops. Put options, on the other hand, have negative delta. This means the price of the option drops when the price of the underlying asset increases. When the price of the underlying asset drops, howe
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Options Premiums Explained

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An option is the right but not the obligation to purchase or sell an asset at a specific price, on or before a certain data.  Options trade at a price called a premium which is the amount a buyer pays a seller for the right to exercise an option.  The premium of an option changes with market sentiment.  The value of that premium is based on a number of factors which include the underlying price of the asset, the time to maturity, current interest rates and implied volatility. A call option is the right to purchase a security at a specific price while a put option is the right to sell a security at a specific price. Binary Options trade on regulated exchanges, and fluctuate with market sentiment.  The price at which an option transacts is generally the premium of the option.  There are some cases, such as in the currency markets, where options trade at an implied volatility value, which is then used to back into the premium of the option. The option buyer pays the seller a premium when
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