What Is the Significance of the "Delta-One" Product in Derivatives Trading? ⎊ Path

What Is the Significance of the “Delta-One” Product in Derivatives Trading?

A "Delta-one" product is a financial derivative whose price changes are expected to be nearly identical to the price changes of the underlying asset. These products have a Delta of 1.0, hence the name.

Examples include futures contracts, forwards, and deep ITM call options. They are significant because they allow traders to gain synthetic exposure to an asset without physically owning it.

What Is the Primary Difference between a Futures Contract and a Forward Contract?

How Does the Market Performance of Decred Compare to That of Other Cryptocurrencies with Different Consensus Models?

Explain the Role of a Collateralized Debt Position (CDP) in Creating Synthetic Derivatives

How Do Traders Use Delta to Manage the Size of Their Directional Exposure?

How Does the Timing of Settlement for a Crypto Future Impact the Tax Year of the Gain or Loss?

Explain the Concept of “Synthetic Options” and How They Are Constructed Using the Underlying Asset and Other Derivatives

How Are Wrapped Tokens Used to Create Synthetic Assets?

How Does Netting Contribute to Reducing Overall Credit Exposure for a CCP?

Glossar

Synthetic Delta-One

Construction ⎊ Synthetic Delta-One, within cryptocurrency derivatives, represents a replication strategy aiming to mimic the payoff profile of an underlying asset, typically a cryptocurrency, using futures contracts or perpetual swaps.