What Does It Mean to Be “Delta-Neutral” in an Options Portfolio?

A Delta-neutral portfolio is one where the overall Delta is zero, meaning the portfolio's value is theoretically unaffected by small changes in the price of the underlying asset. This is achieved by balancing long and short positions in the underlying asset and options.

Traders use this strategy to profit from changes in implied volatility or time decay (Theta) rather than directional price movements.