Delta hedging is a risk management strategy employed in options trading to maintain a neutral position relative to the price of an underlying asset. It involves adjusting a portfolio’s holdings to offset changes in the option’s delta, which measures the sensitivity of the option’s price to movements in the underlying asset. The objective is to reduce or eliminate the directional risk associated with price fluctuations.
Context
In financial markets, delta hedging is a standard practice among sophisticated traders and institutions managing derivative portfolios. Discussions often involve the practical challenges of executing delta-neutral strategies in volatile markets, particularly with the introduction of new derivative products. The effectiveness of delta hedging is frequently assessed in relation to market microstructure, transaction costs, and the accuracy of the delta calculations themselves.
Ethena's cross-chain expansion of its $13.2 billion synthetic dollar to Avalanche enhances DeFi liquidity and yield opportunities, deepening ecosystem composability.
We use cookies to personalize content and marketing, and to analyze our traffic. This helps us maintain the quality of our free resources. manage your preferences below.
Detailed Cookie Preferences
This helps support our free resources through personalized marketing efforts and promotions.
Analytics cookies help us understand how visitors interact with our website, improving user experience and website performance.
Personalization cookies enable us to customize the content and features of our site based on your interactions, offering a more tailored experience.
