Stocks & Commodities V. 26:5 (58-61) Reducing Risk With Delta-Vega Hedging by Seongjin Cho & Ingyu Koh
ARTICLE SYNOPSIS ...Reducing Risk With Delta-Vega Hedging by Seongjin Cho & Ingyu Koh
Predicting market movements with
options can be profitable but risky --
here's how to make it safer.
The size of the option
market has increased significantly,
thanks to high
leverage. Many investors
have come up with various portfolios based on individual
analysis in hopes of gaining profits. In
particular, strategy combination of options
is a popular method among traders
and makes use of an option's time
value for gains. Essentially, you take a
short position and get rewarded for
holding your position as time passes
as long a...
AUTHOR: Seongjin Cho & Ingyu KohDATE: MAY 2008SUBJECT: Trading Techniques