Definition: Beta Weighted Delta | Tackle Trading: The #1 rated trading education platform
Glossary

Beta Weighted Delta

Beta-weighting is a way that investors gauge their portfolio directional exposure (Delta) by normalizing it to a standard benchmark, in this case, the SPY (S&P 500 ETF).

Beta-weighting the portfolio Delta serves three purposes:

  1. Assess the total risk of a portfolio;
  2. Calculate a portfolio’s expected move;
  3. Compare relative risks between stocks.

Example

Glossary - Beta Weighted Delta example

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