“A stock is like a living organism. A sparrow, say. And we are able to create an emergent-based abstraction of that sparrow, which closely approximates the sparrow itself, accounting for migration patterns, wind, weather, and other variables. We can create a similar abstraction of a stock combining the information from the specific ETFs, which represent its underlying dependencies. And if we apply this to the stock we can predict its delta, following the path of its extracted self, because nature follows abstraction.” - Taylor, Billions S02E10

Delta of V is $$\frac{\partial V}{\partial S}$$

So delta of S (long) or -S (short) is $$\frac{\partial (\pm S)}{\partial S} = \pm 1 \ ?$$

If so, does this mean the hypothesis is unnecessary?

if we apply this to the stock

because anyone, for any stock,

can predict its delta


  • 2
    $\begingroup$ I want to recommend Interest Rate Models - Theory and Practice book by Damiano Brigo and Fabio Mercurio to you, just becasue your affinity to quotes. :) $\endgroup$ – vanguard2k Oct 4 '17 at 12:19
  • 4
    $\begingroup$ Sometimes the math gets in the way of the poetry and vice versa... $\endgroup$ – noob2 Oct 4 '17 at 12:37
  • $\begingroup$ @vanguard2k stocal prof already gave us handout from there. Hilarious. Even privault quoted wolf of wall Street $\endgroup$ – BCLC Oct 4 '17 at 17:47

By definition of delta, yes:

$$ f(S)=\pm 1 \times S \quad \Rightarrow \quad \frac{\partial f}{\partial S}(S) = \pm 1$$

  • $\begingroup$ Daneel Olivaw, thanks. Does this mean the hypothesis is unnecessary? $\endgroup$ – BCLC Mar 26 '18 at 14:26
  • $\begingroup$ I guess, I am not sure what hypothesis you are referring to @BCLC. That quote does not make much sense anyway. $\endgroup$ – Daneel Olivaw Mar 26 '18 at 14:44
  • $\begingroup$ Daneel Olivaw, 'And if we apply this to the stock' --> the hypothesis is all that proceeds. Is delta for the whole stock price process $S_t$ instead of a particular $t$? It's been about 3 years since (or 2.5 since OP) I've done this. My focus has been towards pure maths as of late. Please and thanks. / Also edited question. $\endgroup$ – BCLC Mar 27 '18 at 7:13

Not the answer you're looking for? Browse other questions tagged or ask your own question.