what is delta neutral 
delta neutral is a portfolio strategy with multiple positions balancing positive and negative deltas so that the overall delta of the assets is zero options traders use delta neutral strategies to profit from implied volatility or the time decay of options these strategies are also used for hedging below we explain this strategy for novices and more experienced traders alike understanding delta neutralunderstanding the concept of delta is crucial in options trading delta one of the greeks in finance measures how sensitive an option s price is to changes in the price of the underlying asset more specifically delta measures how much an option s price is expected to change for a 1 00 change in the price of the underlying security for example a call option with a delta of 0 25 and worth 1 40 would be expected to have a value of 1 65 if the underlying asset moved 1 00 higher a portfolio s delta can be positive negative or neutral depending on the positions held investors aiming for a delta neutral portfolio want to balance these deltas so that the overall delta of the portfolio is zero this balancing act means that small incremental moves up or down in the underlying asset price would not cause any changes to the portfolio 1 however large price swings changes in volatility and the passage of time can still affect the value of the portfolio getting to delta neutral often means making continual adjustments since the delta might shift away from zero from changes in the market 