A derivative's delta is a measure of the sensitivity of the derivative's price to changes in the underlying asset's price. It represents the change in the price of the derivative for every $1 change in the price of the underlying asset. The delta can be positive, negative, or zero, depending on whether the derivative's price increases, decreases, or remains unchanged when the underlying asset's price changes. A delta of 1 indicates that the derivative's price moves in perfect lockstep with the underlying asset's price, while a delta of 0 indicates no correlation between the two. The delta is an essential component of options pricing and risk management strategies.

A derivative's delta is a key measure that quantifies the sensitivity of the derivative's price to changes in the price of the underlying asset. It represents the ratio of the change in the derivative's price to a small change in the price of the underlying asset. Delta is expressed as a numerical value between 0 and 1 for call options and between 0 and -1 for put options.

For call options, a delta of 0.7, for example, implies that for every $1 increase in the underlying asset's price, the call option's price is expected to increase by $0.70. On the other hand, for put options, a delta of -0.5 indicates that for every $1 increase in the underlying asset's price, the put option's price is expected to decrease by $0.50.

Delta is a crucial risk management tool for derivatives traders and investors, providing insights into how the derivative's value will respond to changes in the underlying asset's price, aiding in strategic decision-making and portfolio management.