DaytradeTeam Brainzzzz

Delta is defined as: The ratio comparing the change in the price of the underlying asset to the corresponding change in the price of a derivative.

This means that the Delta attempts to predict how much the price of the option will move for every dollar that the underlying stock moves. For example, if EBAY moves up $2 and your EBAY call option has a Delta of .62, then you can expect that your call option would have moved up by 1.24 ($2 * .62 delta).

In options trading, it is important to keep an eye on your overall delta of your positions--this lets you know exactly how leveraged you are to the market or individual stocks.