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Delta Hedging a Portfolio

Research Specials LIVE

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Delta is one of the most important Greeks in option trading but doesn't translate well to a portfolio of different stocks and strategies. Fortunately, traders can use Beta Weighted Deltas to compare deltas across positions. In this piece, Beef and Michael G. compare the performance of two portfolios during the market sell-off of 2018. They find that hedging the portfolio of short puts with short shares of SPY reduced the losses and volatility of the portfolio by more than a third! Tune in to hear more about incorporating this strategy to a portfolio.

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