thought i would confuse you some more b/c im just that mean

heres some info i got from the qbank A delta-neutral portfolio can be created with any of the following combinations: long stock and short calls, long stock and long puts, short stock and long calls, and short stock and short puts. clear as mud?

think about deltas: stocks have positive deltas (always equal to 1), calls have positive deltas (between 0 and 1) , puts have negative deltas (between -1 and 0). therefore, you can create delta-neutral portfolios the combinations that you mentioned.

The way I look at this is break it into quadrants. (down up means value of stock) Long Call- LC Short Call- SC etc… LC (up) ! SC (down) LC wins if value goes up ! SC wins if value goes down _______!_____ ! LP (dwn)! SP (up) LP wins if value goes down! SP wins if value goes up For each of those listed above, offset the Long or Short Position with the opposite. Ex. Long stock, hedge with LP or SC (can’t use diagonal SP because value is up) Short stock then LC or SP hedges… Visually this has always helped me out. May help you out or may not.