Delta Hedging: Mitigating Risk in Financial Markets
Delta hedging is a method used to neutralize or offset the risk associated with the price fluctuations of an underlying asset. The “delta” represents the rate of change in the price of an option relative to changes in the price of the underlying asset. By dynamically adjusting the position in the underlying asset, investors can minimize or eliminate the impact of price movements on the value of their overall portfolio.
There are various strategies employed in delta hedging, depending on the specific needs and goals of the investor or trader. Some common strategies include:
- Delta-Neutral Strategy: This approach involves adjusting the position in the underlying asset to maintain a delta-neutral portfolio. It requires continuously monitoring and re balancing the portfolio to ensure the overall delta remains close to zero. By doing so, the investor aims to eliminate the risk of price movements in the underlying asset.
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MCX COPPER – Trading Insights & Updates
Have you Traded our wave analysis on MCX COPPER?
Visit here: MCX Copper: Trend Forecasting Using Elliott Wave analysis
We have written clearly,”If the price remains above the B wave at 785, traders can consider trading towards the targets of 791- 809 – 821+.“