The Delta Direction Index (DDI) is a core metric within the Firebird Trading Systems suite of Greek-Based Technical Analysis Indicators. It is specifically designed to measure the net directional bias of option traders for underlying assets, including Stocks, Futures, FOREX, and Cryptocurrency ETFs.
Core Concept: The DDI quantifies market sentiment by comparing the weighted influence of Call Open Interest (OI) versus Put OI. Instead of simply tracking the volume or raw count of options, the DDI incorporates Delta into the calculation, which weights the open interest by its sensitivity to price. This approach refines the measure of directional risk exposure built into the option market structure, giving more weight to options (like At-the-Money options) that are highly sensitive to price changes.
Calculation and Interpretation: The DDI is calculated by comparing the sum of Call Delta weighted by Open Interest against the sum of Put Delta weighted by Open Interest.
By tracking DDI, traders gain insight into how institutional positioning in the options market is setting up for potential directional moves in the underlying asset.
The Delta Acceleration () indicator is a core component of the Firebird Greek-Based Technical Analysis Indicators suite, specifically categorized under Delta-Based Indicators. This tool is available for Stocks, Futures, FOREX, and Cryptocurrency ETF Traders.
Core Concept: Delta Acceleration measures how quickly Delta is changing over time. It is essentially the “momentum” of directional bias. While Delta measures the directional velocity of an option, Delta Acceleration quantifies the rate of change of that velocity. This translates option market sensitivity into a metric of instantaneous acceleration in price direction.
Trading Application: This predictive metric is exceptionally valuable for detecting early inflection points before price breaks out.
Delta Acceleration acts like a “momentum barometer” derived from option dynamics. It allows traders to anticipate directional shifts earlier than traditional metrics. For instance, a positive acceleration () signifies that the directional bias (Delta) is increasing at an increasing rate. This suggests that bullish momentum is picking up speed, potentially leading to a breakout in the underlying asset.
By monitoring , traders can confirm shifts in underlying energy and convexity before the primary directional indicator (Delta/Velocity) fully registers the move.
Analogy: Think of Delta as the speed of a car moving in a certain direction (the market price). Delta Acceleration is the pressure on the gas pedal. You know immediately the car is about to move faster (a breakout) or slow down (an inflection point) simply by observing the acceleration, even if the current speed (Delta) hasn’t changed much yet.
The Delta/Gamma Ratio () is a fundamental cross-Greek ratio featured in the Firebird Greek-Based Technical Analysis Indicators suite, specifically listed under Cross-Greek Ratios and Composite Predictors.
Core Concept and Calculation: The Delta/Gamma Ratio is defined as Delta divided by Gamma (). This ratio quantifies the relationship between an option’s directional sensitivity (Delta) and its acceleration or curvature sensitivity (Gamma).
To compute the ratio, the indicator utilizes the options pricing model functions available in the trading platform, specifically the built-in functions for calculating Delta (@Delta) and Gamma (@Gamma).
Technical Requirements: Calculation of the ratio requires specific option parameters to be input, including the expiration details (month and year), the option’s strike price, the risk-free interest rate (Rate100), and the volatility (Volty100). The final ratio is calculated by dividing the calculated OptionDelta by the calculated OptionGamma, ensuring that the ratio calculation is only performed if OptionGamma is not zero.
Interpretation: By comparing directional movement to the potential for directional acceleration, the Delta/Gamma Ratio helps quantify the structural efficiency of an option’s sensitivity profile.