The hedging difference between delta neutral and market capitalization neutral

Hedging contracts and options is a complex calculation.

As options move from real value, at-the-money, to out-of-the-money, the delta value decreases.

If you use a combination of near-term options + forward options to hedge, the near-term average value plus the forward out-of-value may double the income, but the delta value can remain neutral, that is, hedging ups and downs, with no risk exposure.

However, once it skyrockets, the delta value will become unbalanced under the influence of large gamma.

Therefore, whether to adopt delta neutrality or market capitalization neutrality depends on judging the strength of the market.

In the bull market, especially the mad bull stage, market value is neutral for hedging.

In a bear market or a weak market, delta neutral hedges.

For example, in my operation today, I have one big pie contract, 1 out-of-value option on the day I sell the big pie option, and 1 out-of-value option on the second option in the seven-day period.

The return is equivalent to two pie options, but the risk is 0.3 less.

Perfect. $BTC