Make Sure You Know This “Delta Accelerator”

You should know by now that there are several factors that affect the price of an option – not just the price movement of the underlying asset.

The variables that exist that account for the fluctuations of options price movement are known as the options “Greeks,” and we’ve covered many of these – Theta, a measurement of options time decay; Delta, how an option’s price will move with price movements in the underlying; and Vega, how sensitive an option is to the Implied Volatility associated with the underlying.

I’ve told you that Delta is the single most important factor in determining an option’s price. Today’s “Greek” shares a special relationship with the Delta, measuring the rate of change in the most important component in an option’s price.

I like to call it the “Delta Accelerator.”

Here’s what I’m talking about…

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Target Big Price Moves Easily With This Strategy

On Tuesday, I gave you an in-depth look at Delta, a major component of options pricing that can tell you how much your option will move in relation to moves in the stock price.

But there are a few more “Greeks” you’ll need to get to know if you want to be a successful options trader.

If you’ve been with me for a while, then you know that volatility has a huge impact on options pricing, but we haven’t really covered the mechanics of how that happens, or what it means for your money.

Understanding today’s lesson is crucial – I’m going to show you how to find stocks with a chance to make big moves… and how to identify potentially lucrative options plays to profit on those moves.

We’re going to explore in detail the Greek that measures changes of an option’s value based on how much the Implied Volatility (IV) on the underlying security changes.

Let’s take a look…

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