What Is the Delta of an Options Contract and Why Is It Important for Hedging?
Delta is one of the "Greeks" and measures the sensitivity of an option's price to a one-unit change in the underlying asset's price. A delta of 0.5 means the option price will move 50 cents for every $1 move in the underlying.
It is crucial for hedging as it indicates the number of underlying shares or tokens needed to create a delta-neutral portfolio.
