How do I use the Greeks, for instance to set up a Delta-Neutral trade?
First, set the Master Row to the current information on a stock that interests you. Then, use a Template for a strategy that is “approximately” neutral, such as a calendar or a double diagonal. Look at the value for Delta in the Master Row. This shows the Delta of the entire position. It may show something like “100”, which means the overall position is not really Delta Neutral – it will gain $100 if the stock goes up 1 point, or lose $100 if the stock goes down 1 point. To “neutralize” the Delta, the easiest thing to do is use stock. In this example, to neutralize a Delta of 100, you would need to SHORT 100 shares of stock. Enter SHORT 100 shares in the stock row, make sure the stock row is Included, and click the Graph button. You should see the Master Row Delta go to zero, and the blue Entry Line on the graph look a little more evenly balanced (flatter) than it looked before neutralizing the Delta. Why would anybody want to do this? Delta-Neutral traders are looking to profit from s
