A delta neutral trade is one in which a long and short options contain offsetting delta so that the net delta is at zero. Delta is a measurement of the degree in an option's price movement when the underlying moves.
The theme of delta neutrality can refer to many differently constructed strategies including spreads (covered and uncovered) and straddles. When an option position is covered with long stock (one short call offsetting 100 shares of stock), the delta neutral creates an equivalent stock
