While I’m with people playing top golf I wanted to write an article on delta.
To recap an option is out of the money when the strike price it diverges the current price. For example for call options if the strike price is below the current price that option is in the money. It will have both extrinsic value and intrinsic value. Remember when we mentioned intrinsic value that means that if the option is exercised at this moment the amount of value between the strike price of a current price represents the intrinsic value. Because options expire in the future they also have an extrinsic value which is governed by four primary factors.
The four Greeks that truly matter are delta, theta, gamma, and vega. The first three are derived from Greek letters by the last one is a common name that has been derived by options traders. These are known as the “greeks”.
