Benefits of Being Delta Positive
Being delta positive means your options position gains value when the underlying stock rises. Position delta is the sum of each leg's delta times the number of contracts times 100; a positive total means the position behaves like owning shares. The main benefits are directional upside with less capital than buying stock (long calls), defined risk (bull call spreads), and income on shares you hold (covered calls). The cost is that the position loses value if the stock falls, and long options also lose time value every day. This article is educational, not investment advice.
Try it in your own spreadsheet
Get the free MarketXLS sample workbook (.xlsx).
No account needed. MarketXLS live data requires a paid plan. Preview workbook
Explore more videos
What is delta?
Delta measures how much an option's price is expected to change for a $1 move in the underlying. Call deltas range from 0 to 1 and put deltas from -1 to 0. A call with a delta of 0.60 is expected to gain about $0.60 per share (about $60 per contract) if the stock rises $1. Long stock has a delta of 1 per share.
Common delta positive strategies
- Long call: positive delta with limited risk (the premium paid) and unlimited upside.
- Bull call spread: buy a lower-strike call and sell a higher-strike call; positive delta with capped profit and capped loss.
- Short put or bull put spread: positive delta that collects premium; profits if the stock stays above the short strike.
- Covered call: long 100 shares plus a short call; still delta positive, with income from the call and capped upside.
Benefits and risks of a delta positive position
Benefits: you profit from a rise in the stock, can size exposure precisely by choosing strikes with different deltas, and can control risk with spreads.
Risks: you lose if the stock falls. Long options also have negative theta (time decay), and delta itself changes as the stock moves (gamma), so the position's exposure shifts over time.
Tracking delta in Excel with MarketXLS
MarketXLS returns option Greeks in Excel. =QM_GetOptionChain("AAPL") returns the chain with delta for each contract, and =opt_Delta(StockPrice, OptionPrice, ExpiryDate, "Call", Strike) calculates delta for one option. Multiply each leg's delta by contracts and 100 and sum the legs to get your position delta.
See how MarketXLS can help here and here .
Here are some templates that you can use to create your own models
Conversion Strategy
Delta Neutral Hedging
Search for all Templates here:
Relevant blogs that you can read to learn more about the topic
Algorithmic Trading – Overview, Strategies, Pros And Cons
Long Diagonal Spread With Puts Option Strategy(Excel Template)
Long Call Option Strategy (Explained With Excel Template)
Long Strangle Option Strategy (Using Excel Template)
Diagonal Spread With Calls Option Strategy (Excel Template)