Delta case describes the change in prices of options in financial security market of the underlying stock at the time of sale or towards its maturity period. Options used in security market are call options and put option. Delta explains the relationship between an option price and price of the underlying stock hence. In a call option, a rise in the price of an underlying asset results in a proportionate increase in the price of that same option. For a put option investors purchase their assets with an expectation of a fall in the future for the underlying instrument making their prices fall at maturity period.
An interpretation of this portfolio is that delta is important to financial investors as it shows the degree of sensitivity in an option value prices to determinant factor changes of the underlying instrument in making a decision whether to sell, buy or hold the option (Heyman and Pronk 4). Examples of delta case evaluations are Vulferam AG Company that makes wire cables and automotive systems for telecommunications.
It became the leading supplier of wiring cables in Europe through an acquisition they obtained from Centauri Connective Systems. It made the company expand other branches after getting a forty percent increase making them has full ownership, and one trusted company in their outputs of wires in the Asian market with other competitors (Narayanan et al. 4).
Other competitors were Odawa System Corporation based its products on manufacturing electric vehicles and Shagimaw Corporation also manufacturing new electric vehicles in collaboration with North American automotive companies. In comparison, these three competitors’ sales outcomes were analyzed using valuation, profitability margin ratios, turnover operations, financial equity and assets per share data (Narayanan et al.6).
In drawing the financial data, a conclusion was that they were all for producing quality products for sale to consumers in the market in maintaining their profitability ratios. It is arrived at by developing strategies that will increase their innovation growth in the near future and by developing close customer relationships (Narayanan et al.8).
In conclusion, delta analysis is an important tool in determining a company’s net worth and strategies that managers need to put in place in the industry with increasing technological channels that are employed in the manufacturing department to have a quality and automobile vehicle and compete effectively in the market with other competitors producing the same products.
Works cited
Narayanan G. V, Brem Lisa andPackard Mathew. Delta/ signal Corporation. July 8 2013.file:///C:/Users/Eunice/Downloads/Delta-Signal_Case.pdf
Heyman Dries and Pronk Maarten.Individual Investors’ Option Trading: Attention Grabbing versus Long-term Strategies. 2010. https://www.cass.city.ac.uk/__data/assets/pdf_file/0010/79471/Heyman.pdf
