Why Tom Preston Ignores Delta on Vertical Spreads

Delta is one of the best ways to measure risk, so why does Tom Preston barely look at it on a vertical spread? Delta is really the equivalent shares of stock a position acts like, and a tight call spread might carry only eight shares of risk. On a defined-risk trade with max profit and loss set up front, that number doesn't drive his call. The cooler insight: a spread's delta climbs from near zero toward 100 and back as the stock crosses the strikes. 📊 tastylive: https://www.tastylive.com/ 📰 Get Tom's pre-market analysis every morning: https://www.tastylive.com/newsletters 📘 FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 📱 Follow tastylive on X: https://x.com/tastyliveshow Chapters 00:00 Why skip delta on verticals 00:25 What a vertical actually is 00:55 Delta always runs one to zero 02:00 Deep in and out of the money 03:10 A spread's delta, one minus the other 03:40 Delta as shares of risk 05:00 Why eight shares doesn't sway him 06:20 Wider strikes, bigger delta 07:30 Zero to 100 to zero across strikes 09:40 How delta shrinks into expiration #tastylive #cherrybomb #tompreston #delta #verticalspread #optionsgreeks #definedrisk #optionsforbeginners #optionstrading #stockmarket tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we'll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. tastylive content is created, produced, and provided solely by tastylive, Inc. ("tastylive") and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims, including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.