A position in which negative deltas offset positive deltas. The overall delta of the position is zero or very close to zero. Positions involving complex trades are hedged by eliminating the effect of delta (market bias), i.e., total exposure to the position’s context: time, underlying movement, volatility, and interest rates. Maintaining a delta-neutral position requires consistently adjusting the component trades with the passage of time.

For example, such positions may involve low-risk options where a trader attempts to lower the delta associated with a long position in one undelrying (stock) or option contract.

Delta-neutral trading could be used to capture a premium or to bet (and make profit) on changes in implied volatility.