Lesson Overview

Delta Hedging

Because delta is a measure of the responsiveness for an option position to the underlying stock, traders have been carried away for years with the concept of delta neutral trading as a way to generate income while staying completely nondirectional.

And while we absolutely want to stay as neutral as possible I will help you understand why staying delta neutral all the time as a complete fantasy and unrealistic for retail traders. Plus, we'll show you how you can use beta to weight your deltas as a means to find appropriate hedges.

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