How Can a Trader Achieve a Delta-Neutral Position Using Only Options? ▴ Learn

How Can a Trader Achieve a Delta-Neutral Position Using Only Options?

A trader can achieve a Delta-neutral position using only options by combining long and short positions in options with different Deltas, such that the sum of the Deltas of all positions is zero. For example, buying a certain number of ATM calls (Delta near 0.50) and selling a corresponding number of OTM calls (Delta near 0.20) can create a net Delta of zero.

This is a common practice in strategies like butterfly spreads.

How Can an Options Trader Use a “Synthetic Short” Position to Achieve a Similar Outcome to a Double-Spend?

What Is the Synthetic Position Created by Combining a Long Call and a Short Put?

What Is a “Zero-Cost” Collar and How Is It Achieved?

How Does Variation Margin Contribute to the ‘Zero-Sum’ Nature of Futures Trading?