# What does Taylor Mason mean by predicting delta of a stock?

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 Mason, Billions S02E10

I tried asking on quant se but no luck. I'm basically wondering if we can always predict a stock's delta. I have a feeling the show might've been just saying a bunch of words to sound smart but then turned out incorrect. The thing is the stock's delta should be either +1 or -1 depending on what position you are, namely, resp, long or short.

• To me this sounds like a lot of empty talking and it is plain wrong as well. Nature does not follow abstraction, it follows local optimization and selection with random small or large changes from time to time. Which is why all that nice and abstract economic models fail to deliver accurate predictions and nice and abstract software turns into a huge mess of special cases once it meets real life complexity Commented Jul 9, 2021 at 12:56
• That's strange, I saw this question on economics.se as well. Stack Exchange does not like double-posting (or triple-posting!) Commented Jul 9, 2021 at 13:46
• Triple-posted (on Movies and TV). Commented Jul 10, 2021 at 2:57
• Remember that if anyone has a really useful retail investing insight, beyond basic strategies like diversification, they aren't going to waste time writing books and doing presentations about it. Commented Jun 20 at 14:10

You seem to be taking the definition of delta from options models, where "Delta" is the derivative of the option price with respect to the underlying price.

Delta in mathematics more generally means "change", so I interpret the statement to mean the change in the stock price, either the change over a period of time or the average incremental change, since their abstraction seems to be describing a "random walk".

• makes a lot of sense. thanks D Stanley. HOWEVER..........if this were some idk medical or even, say, law show then whatever they can get the finance/economics stuff wrong but this is really about finance. do people in actual financial firms (or economic firms if there's such a thing?) talk about delta of a stock?
– BCLC
Commented Jul 13, 2021 at 9:18
• Not in the "derivative" sense but I do know quants that use delta in a more general sense of "change" (i.e. the delta from T to T+1). Commented Jul 13, 2021 at 13:20
• "their abstraction" ftfy Commented Jul 13, 2021 at 13:38
• oh yeah i guess delta is sometimes used as change instead of rate of change even in finance eg the T to T+1...ok thanks
– BCLC
Commented Jul 17, 2021 at 21:04

Here delta means "change". What Taylor is saying that each stock has certain underlying dependencies. E.g. a gold mining company would be dependent on both the price of gold, the overall market, and the exchange rates of the countries that export / import gold. Combining these factors using etfs (e.g. GLD for the price of gold, SPY for the overall market, currency etfs for exchange rates) we could largely explain and predict the changes in the price of the stock or its delta.

• Convention used in the stock market: For derivatives such as options, delta is an estimate of the price change given a \$1 change in its underlying security. For example, if an option moves 20 cents when the underlying moves \$1, its delta is .20 (+ or -) where the +/- sign indicates direction. The delta of the underlying is always 1.00 (+1 if long, -1 if short). This has nothing to do with predicting direction. Commented Jun 26 at 15:16

It's a fictional TV show. "Predicting the delta of a stock" doesn't mean anything.

• so you agree 'I have a feeling the show might've been just saying a bunch of words to sound smart but then turned out incorrect. ' ?
– BCLC
Commented Jul 10, 2021 at 21:42
• @BCLC I'm guessing that the writers were fully aware that they were writing nonsense. Commented Jul 11, 2021 at 1:07
• lol ok thanks Tanner Swett
– BCLC
Commented Jul 13, 2021 at 9:16
• also do you disagree with D Stanley? (I actually kind of disagree with D Stanley)
– BCLC
Commented Jul 13, 2021 at 9:19
• @BCLC I think D Stanley’s answer is also a reasonable interpretation. I don’t agree with it, but I think it’s reasonable. Commented Jul 13, 2021 at 22:10

After reading the description, my first thought was that I should look for a screen saver of a sparrow.

My next thought is that you're quoting a non-binary character on the show Billions on American television? Really? That's the source of your financial information?

Yes, you are correct. A stock's delta is either +1 or -1.

• 'Really? That's the source of your financial information?' --> no my source is from my master's degree in mathematical finance. so you agree 'I have a feeling the show might've been just saying a bunch of words to sound smart but then turned out incorrect. ' ?
– BCLC
Commented Jul 10, 2021 at 21:43
• If the source of your financial information is from your master's degree in mathematical finance then I have to wonder why what a fictional character on a TV show says about market prediction makes you question financial reality. Commented Jul 12, 2021 at 13:16
• well it's the 1st time i've ever heard delta of any financial thing in a tv series or anything. i don't work in finance. i don't study finance anymore.
– BCLC
Commented Jul 13, 2021 at 9:16
• and thanks Bob Baerker but to clarify: so you agree 'I have a feeling the show might've been just saying a bunch of words to sound smart but then turned out incorrect. ' ?
– BCLC
Commented Jul 13, 2021 at 9:19
• also do you disagree with D Stanley? (I actually kind of disagree with D Stanley)
– BCLC
Commented Jul 13, 2021 at 9:19