Chapter 05 · Section 5.1

The Final table

Here is our final table:

                   Fixed hedge            Delta hedge 

                  At one-to-one           An amount weighted by 
Covers            relationship            the delta factor    

Protection        Depending on exercise   Depending on low 
                  price chosen            delta was calculated 

Intention         Yes, if prices move     None, the hedge constantly 
to exercise       against position        compensates for price changes