Delta measures the probability of an option expiring in the money, but what does this mean for us?
Using delta as our strike selection allows us to get a fairly accurate representation of the risk we are taking on relative to the premium we collect.
Over the years, delta has adjusted for the growth in stock price, changes in volatility, and the premium collected. This is what makes it easy to use!
There is no need to calculate risk/reward metrics such as volatility yourself because delta is an all-in-one solution that allows us to measure risk against reward when entering a trade.
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