Position Delta

Position delta measures the sensitivity of an option or a portfolio to a change in the price of the underlying asset. It indicates how much the value of the position is expected to change for every one-unit move in the asset's price.

A delta of 0.5 means the option's value will change by 0.5 for every 1 move in the underlying. For a seller of options, managing the net delta of the portfolio is key to controlling directional risk.

A portfolio can be made delta neutral, meaning it is not affected by small price changes. In crypto, where price volatility is high, monitoring position delta is essential for risk mitigation.

Traders adjust their delta by buying or selling the underlying asset or other derivatives. It is a primary metric for maintaining the desired risk profile of a trading strategy.