How Does the Delta of an OTM Option Compare to an ATM Option?

The Delta of an Out-of-the-Money (OTM) option is always lower in absolute value than the Delta of an At-the-Money (ATM) option. ATM options have a Delta closest to 0.5 (or -0.5 for puts) because they have the highest probability of expiring in the money.

OTM options have a Delta closer to 0, reflecting a lower sensitivity to changes in the underlying asset's price. This is because a large price move is needed for the OTM option to become profitable.

This lower Delta means the OTM option price changes less for a $1 move in the underlying asset.