Options Portfolio Hedging: Applying the Initial Hedge
Interactive

Options Portfolio Hedging: Applying the Initial Hedge

Intuition Publishing
Updated Sep 24, 2020

An option trader has a number of questions to consider when applying a hedge. In our discussion here, we look at the merits of using modified delta ahead of delta, explore the issues that can arise in communication when traders use different models, and describe the problems that can occur with changes in correlation between assets. Our last section is concerned with hedging the volatility exposure of an option or option portfolio.