Back To Define:by Optiontradingpedia.com


Define: Delta Neutral Trading



Delta Neutral refers to options positions with an overall position delta value of zero or very near zero.

Delta neutral trading is the trading of delta neutral positions which bears no directional risk and primarily seek to profit from time decay or volatility. Options positions which are delta neutral would not increase nor decline in value with any change in the price of the underlying stock and is the primary method of trading used by Market Makers.

Read the full tutorial on Delta Neutral Trading.