how to hedge a open a short
- Thread starter Mdtbyk
- Start date
Delta-hedging?
what is that?
It's where you hold a position on the underlying so that your portfolio delta is equal to 0 (or close to) so you're not exposed to price movements and just pick up the premium on the short contract.
but i do believe the market will correct its self in the next 2/3 weeks so i wouldn't want to hold that position
get a good book on options and/or do an internet search. by the way if you bought a put you are long the put.
im actually short
Hedging isn't free of costs or additional risks. When you protect against one type of risk, you either introduce additional costs or additional risks that may not have been present previously. You need to identify exactly what risks you want to protect against, what risks you're willing to take on, and/or costs you think are reasonable.
The normal way to protect a short put would be to buy a further away put (either in terms of strike or date). I understand they're expensive now, but that's the market price for that protection right now.
If you're looking for a way to reduce risks without adding any additional risks or cost any extra money, then I don't have anything further to say.
yeah thats what i thought but maybe there is a unconventional way thanks all
why should there be a cheap way to hedge if people are nervous about the market. do you thank professional traders are idiots?
why do you ask what is delta trading ? too lazy to do a search and get complete info. ?