Delta Neutral Vs. Gamma Neutral: Exploring Advanced Hedging Strategies In Options Trading

Big money is never directional and wants to always be minimally biased so that they are shielded against large price swings both up and down.

Risk management serves as the backbone of successful trading, particularly in derivatives like options where market volatility can substantially influence profits and losses. Two prevalent hedging strategies in this context are the Delta Neutral and Gamma Neutral strategies. Despite both being used to manage risk, the latter is often perceived as a superior tool for hedging.