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Old 11-18-2016,
akigurulo akigurulo is offline
 
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Default delta netural trading

have any of you used delta netural trading example --

owning 100 shares of stock , selling 2- 50 delta calls , then letting time expire .
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Old 11-20-2016,
AlekseyPlupt AlekseyPlupt is offline
 
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How is that Delta neutral?
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Old 11-20-2016,
Alealokato Alealokato is offline
 
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Sounds like you just described selling covered calls.
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Old 11-21-2016,
AlexIvlew AlexIvlew is offline
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The term "Delta Neutral" refers to any strategy where the sum of your deltas is equal to zero. Calls have positive Delta and Puts have negative Delta.

A share of stock, by definition, has a delta of 1. If you own 100 shares of stock and sell 2 at-the-money calls that have a delta of .50 (i.e. 50 per contract), yes you've created a basic delta neutral trade. The problem is your trade won't remain delta neutral if the stock moves in either direction away from the strike price.
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