Definition ∞ A delta neutral strategy is an investment approach designed to mitigate price direction risk in a portfolio. It involves balancing long and short positions across related assets or derivatives to offset potential losses from market fluctuations. The objective is to profit from other market factors, such as volatility or time decay, rather than price movements. This method seeks to maintain a neutral exposure to the underlying asset’s price.
Context ∞ Delta neutral strategies are commonly discussed in crypto trading news, particularly in relation to options and futures markets for digital assets. Market participants employ these strategies to manage exposure during periods of high volatility or uncertain price direction. The effectiveness of such strategies is closely monitored as derivative markets mature within the digital asset ecosystem.
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