If you are an option trader and the way you make money is by trading volatility, how often do you need to delta hedge an option? A. Theoretically constantly as the underlying forward moves in the market. Practically you hedge as often as practicable. This is the art in trading. B. Just once at the beginning and then you leave it alone C. it depends on what asset class you are trading D. If you're a volatility trader you don't delta hedge
If you are an option trader and the way you make money is by trading volatility, how often do you need to delta hedge an option? A. Theoretically constantly as the underlying forward moves in the market. Practically you hedge as often as practicable. This is the art in trading. B. Just once at the beginning and then you leave it alone C. it depends on what asset class you are trading D. If you're a volatility trader you don't delta hedge
Brief Principles of Macroeconomics (MindTap Course List)
8th Edition
ISBN:9781337091985
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter9: The Basic Tools Of Finance
Section: Chapter Questions
Problem 9PA
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If you are an option trader and the way you make money is by trading volatility, how often do you need to delta hedge an option?
A. |
Theoretically constantly as the underlying forward moves in the market. Practically you hedge as often as practicable. This is the art in trading. |
|
B. |
Just once at the beginning and then you leave it alone |
|
C. |
it depends on what asset class you are trading |
|
D. |
If you're a volatility trader you don't delta hedge |
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