Options: Calculating Delta, Part 2

{ Posted on Mar 27 2009 by Minyanville }
The recent article Options: Calculating Delta Part 1 prompted Minyan P. to put forth this query: “Steve I really don't understand why I have to worry about the delta. Suppose I buy a call at $1 with a strike price at $30. If the stock goes to $35 I expect the call price with the $30 strike to go to $6. If it doesn't I exercise the call option then sell the stock. My trade is more profitable that way and because it's an American-style option I can exercise it at any time.” This Minyan might not realize it but ...

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