# Long Delta and Short Delta?



## Seneca60BC

Hi

Can someone explain to me what Long Delta and Short Delta basically means ?

Thanks!


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## mazzatelli1000

Seneca60BC said:


> Hi
> 
> Can someone explain to me what Long Delta and Short Delta basically means ?
> 
> Thanks!




Long Deltas are when you have an option position where an increase in the underlying price also increases the value of the option
E.g. Long Call, Short Put

Short Deltas are where you have an option where a decrease in the underlying price will increase the value of your option
E.g. Long Put, Short Call

Think of long deltas as positive delta and short deltas as negative delta.
It will lessen the confusion with whether the option is long or short, because sometimes people get confused that all long options have long deltas and vice versa.


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## Seneca60BC

Thanks for that mazz - that clears it up - can I ask - why do you hate Gamma ?


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## mazzatelli1000

Seneca60BC said:


> Thanks for that mazz - that clears it up - can I ask - why do you hate Gamma ?





Yeah every now and then, near expiration, Gamma will jump up and kick me in the nuts before I can get away


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## Seneca60BC

I thought Gamma falls as we approach expiration ?


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## mazzatelli1000

Seneca60BC said:


> I thought Gamma falls as we approach expiration ?




It depends where the underlying is.

If the option is deep ITM or OTM, coming towards expiration Gamma will not be very large, if anything dwindle.

But if the option is ATM or within that vicinity, delta could fluctuate wildly as movements to either side of the ATM strike could mean the option is ITM one moment and OTM the next. 

Remember that OTM delta = 0 , while ITM Delta = 1
Imagine the above scenario with 5 minutes til expiration
Long Call Option is ATM = delta 0.5
Price rallies, it becomes ITM with delta of 0.9 but then a sell off, it becomes OTM say at 0.1.

Combine that with less time to expiry and/or drop in IV means the delta will move around alot - which is what Gamma is measuring - the sensitivity of delta.


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