Options Handbook
Options Greeks Cheat Sheet
Delta (Δ)
Rate of price change per $1 move in underlying
| Value | Position | Meaning |
|---|---|---|
| +0.01 to +1.00 | Long calls, short puts | Profits when stock rises |
| -1.00 to -0.01 | Long puts, short calls | Profits when stock falls |
| ±0.50 | At-the-money | Moves ~$50 per $100 stock move |
| ±0.20 | Far out-of-money | Low probability of expiring ITM |
| ±0.80 | Deep in-the-money | High probability of expiring ITM |
Portfolio delta = sum of all deltas (e.g., +500 = bullish bias)
The Wheel Strategy: A Premium Collection System
The Wheel Strategy generates consistent income through systematic premium collection from selling puts and calls. This conservative options approach delivers boring but reliable profits for patient traders willing to avoid assignment through active management.
The Primary Goal
The objective is collecting premium, not owning stock. While you must stand ready to accept assignment, taking shares represents a temporary setback requiring patience and management. Properly executed, assignment should occur only a couple times per year. Frequent assignments indicate poor stock selection or position management.