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Delta Hedging - Buy/Sell contracts as Delta changes
**WARNING: I am confused here. If you are confused as well I would not read any further as what I'm about to type may confuse you more and ruin what you learned. ***
Can someone help me with this topic? It's bothered me for awhile now and I'm trying to get some last minute clarification.
For Delta Hedging w/ STOCK (you are long the underlying):
An increase is stock price (assuming no change in delta) --> Buy more options
An increase in delta --> Sell options
For Delta Hedging w/ CURRENCY:
An increase in FX --> Sell more options?
A decrease in FX --> Buy more options?
Thanks. |
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