Ok, I'm comfortable with options, comfortable with futures but I have a few basic questions regarding options on futures. To make it easy I'll give an example and if my understanding is woefully incorrect I'd appreciate someone letting me know.
ex. Straddle
YMM04 is at 10000
10000 June Call is at ~200 delta at .5079
10000 June Put is at ~205 delta at -.4908
now if I wanted to put on a delta neutral position here
this leaves me with a positive delta of .0171 .
given the above I am long 1.71% of a dow mini, yes?
1.71%*50000=855 the daimonds are trading at 104.41
so could I hedge with them?
855/100.41=8.52 , so I could short 8 or 9 DIA per straddle to open it up neutral (well close to neutral)?
If I am out of whack on this this thought process I'd appreciate the input.
-thanks,
Doji
ex. Straddle
YMM04 is at 10000
10000 June Call is at ~200 delta at .5079
10000 June Put is at ~205 delta at -.4908
now if I wanted to put on a delta neutral position here
this leaves me with a positive delta of .0171 .
given the above I am long 1.71% of a dow mini, yes?
1.71%*50000=855 the daimonds are trading at 104.41
so could I hedge with them?
855/100.41=8.52 , so I could short 8 or 9 DIA per straddle to open it up neutral (well close to neutral)?
If I am out of whack on this this thought process I'd appreciate the input.
-thanks,
Doji