Delta Hedging Explained | Options Trading Lesson

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Delta hedging is a technique used by options and stock traders to reduce the directional risk of a position. The goal of delta hedging is to bring a position's delta closer to zero.

In this video, you'll learn:

1. What is delta hedging?
2. Trading strategies for hedging strategies with positive deltas
3. Trading strategies for hedging strategies with negative deltas

To support these points, you'll see real trading examples of the implementation of delta hedges:

1. Long puts against long shares of stock
2. Long calls against short shares of stock tastytrade, Inc. (“tastytrade”) has entered into a Marketing Agreement with Project Finance(Marketing Agent”) whereby tastytrade pays compensation to Marketing Agent to recommend tastytrade’ brokerage services. The existence of this Marketing Agreement should not be deemed as an endorsement or recommendation of Marketing Agent by tastytrade and/or any of its affiliated companies. Neither tastytrade nor any of its affiliated companies is responsible for the privacy practices of Marketing Agent or this website. tastytrade does not warrant the accuracy or content of the products or services offered by Marketing Agent or this website. Marketing Agent is independent and is not an affiliate of tastytrade.