Recent content by Fractal Flow

Ironically, hedging is the easiest part of trading once you understand the partial derivatives of the Black-Scholes model. It's more difficult to learn, but it's easier to apply than many other trading methods that are seen as simpler.

Hedging is what bank traders do in order to transfer the risk of credit operations they engage in to other participants in the financial markets (like other traders). Hedging is primarily done using a combination of spot and the derivatives market or entirely via the derivatives market. Some...