Delta & Risk Level

delta measures the sensitivity of an option's price to a $1 change in the price of its underlying asset an option's delta is the probability that it will finish in the money the higher the delta, the riskier the vault let's assume we have a call option priced at $1 00 with a delta of 0 50 this means that for every change in the price of the underlying asset, the option's price will change by 50% of that amount in this scenario, the price of the underlying asset increased from $96 to $97 5, which is a $1 5 move consequently, the option's premium will increase by 50% of this $1 5 change, which is $0 75 ($1 5 50% = $0 75) therefore, the new price of the option will be $1 75 it's important to note that call options always have a positive delta between 0 and 1 00, while put options always have a negative delta between 0 and 1 00 being long a call results in positive delta, while being short a call results in negative delta conversely, being long a put results in negative delta, and being short a put results in positive delta traders typically refer to delta without the decimal point, so a delta of 0 50 is commonly called a 50 delta the absolute value of delta also indicates the approximate probability that the option will finish in the money for example, a delta of 20 suggests a 20% chance of finishing in the money, while a delta of 50 suggests a 50 50 chance delta is dynamic and changes with movements in the underlying asset options with a delta less than 50 are considered out of the money if the delta is greater than 50, the option is in the money a delta close to 50 indicates the option is at the money strategy risk level delta at auction covered call https //docs typus finance/defi options vaults#18lfj (capped call) conservative 5 moderate 25 30 exclusive for \ sui daily 3x covered call (capped call) \ hasui daily 3x covered call (capped call) \ vsui daily 3x covered call (capped call) aggressive 45 call selling https //docs typus finance/defi options vaults#fguei moderate 25 aggressive 45 put selling https //docs typus finance/defi options vaults#xds35 (capped put) moderate 25 30 exclusive for \ sui daily 3x put selling (capped put) aggressive 45 call spread https //docs typus finance/defi options vaults#k3ka moderate 10 25 aggressive 25 45