Direction Doesn't Matter: Trading Options Delta Neutral

The consequence of having a position that is delta neutral is that for small changes in the price of the stock, the total value of the position does not change. Note the emphasis on the word small. In effect, by making a position delta neutral, we have eliminated, or at least reduced, the impact of a change in the value of the stock on the value of the position.

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Killed By The Huntsman (NYSE: HUN)? Not These Options Traders!

Shares of Huntsman Corp. (HUN) fell over 40% on Wednesday as markets digested the news that buyout firm Apollo Management (and one of its businesses, Hexion Specialty Chemicals Inc.) announced that they were suing to back out of an agreement to acquire the chemical maker for $6.5 billion. Well, some astute options traders were all over this play even before the news hit the wires. Significant options activity was seen in several at-the-money and near-the-money strikes…

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