Advanced Lesson 16 of 18 · 8 min read DaySwing
The greeks in practice
Choosing strikes by delta, why the last 30 days burn fastest, and how volatility changes the price.
- Delta is how fast an option moves with the stock. It is also a rough read on the odds the option finishes in the money.
- Time decay is slow early and fast late. An at-the-money option bought 60 days out loses about 70% of its value in its last 30 days.
- Pick the expiry from how long your idea needs, then add room. Check for earnings, because implied volatility often drops right after the report.
This lesson uses the greeks to choose a strike and an expiry. Examples use a made-up $100 stock and calls expiring in 45 days. Puts work the same way, but their delta is negative.
Delta: speed and rough odds
A delta of 0.70 means the option gains about $0.70 per share when the stock rises $1. One contract covers 100 shares, so that is about $70 per contract.
Delta is also a rough probability. A 0.30 delta call has about a 30% chance of finishing in the money, meaning above its strike (the price the option lets you buy at) on expiry day. It is a rough guide, not a forecast.
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Log inEducation only. Not personal investment advice. Examples use round numbers for clarity; check current prices, fees and rules before acting.