# of contracts in delta hedge

CFA Level III
#1

I don’t have my books with me. Can someone help me out with this? Is it: (-1/delta) x (Value to be hedged/Futures price) or (-1/delta) x (Value to be hedged/Units per contract) Thanks

#2

If you are using options to hedge the position I don’t think there are any futures involved hh. It should be the second one I think.

#3

yes using options is a substitute to futures.

#4

Sorry - I meant the option value per contract in the first one, vs the multiplier in the second formula. so (-1/delta) x (value to be hedged/value of an options contract) I think that is it? Is that right?

#5

hh Wrote: ------------------------------------------------------- > Sorry - I meant the option value per contract in > the first one, vs the multiplier in the second > formula. > > so > > (-1/delta) x (value to be hedged/value of an > options contract) > > > I think that is it? Is that right? Looks good to me.

#6

the second one for currencies.