Consider a Position in a Single Option on a Stock $\Delta P$

question 3

Multiple Choice

Consider a position in a single option on a stock. The position has a delta 12. The stock price is 10. What is an approximate relationship between the change in the portfolio value in one day, $\Delta P$ , and the return on the stock in one day, $\Delta x$ ? choose one)

• A) \(\Delta P = 12 \Delta x\)
• B) \(\Delta P = 1.2 \Delta x\)
• C) \(\Delta P = 120 \Delta x\)
• D) \(\Delta P = 22 \Delta x\)

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