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Delta Hedge

   Also found in: Wikipedia 0.01 sec.
Delta hedge
A dynamic hedging strategy using options that calls for constant adjustment of the number of options used, as a function of the delta of the option.

Delta Hedge
In options, a strategy in which one reduces the risk to an option by taking an opposite position on the underlying asset. For example, if one has a short position on an option, one may hedge the risk by taking a long position on the underlying asset.


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delta hedge 30% to 40% of the stock held by the non-recourse subsidiary).
Our previous 100% hedge policy has been replaced by a delta hedge policy.
As a consequence of the new delta hedge policy, Van der Moolen will be holding a variable number of VDM shares, tracking the delta of the total options outstanding on a lagging basis.
 
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