Options Jive

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Beta Weighted Deltas

Options Jive

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Delta is one of the most important Greeks as it measures our directional risk, but because of varying prices and volatilities we can’t just sum deltas in a portfolio of different stock positions. Beta weighting adjusts each stock’s delta to allow traders to compare the relative risk between different stocks and see the total risk of a portfolio and how we might adjust its delta.

In this piece, Tom and Tony review the conceptual aspects of beta weighting deltas and its applications in portfolio management.