Delta neutral
From MarketsWiki
Revision as of 09:41, 22 February 2017 by JohnJLothian (Talk | contribs)
Delta neutral describes an option or other derivative strategy that has low delta risk; it will not immediately profit or suffer from a change in the price of the underlying commodity.
In a delta neutral trading strategy, when the trader dynamically hedges his or her delta risk, he or she is left with exposure to volatility risk. Such a person is often referred to as a volatility trader.
