c.f. CFAI Vol 5, p309 Is Hedge Ratio = -1/delta = -Vo x n? If Hedge Ratio is -ve, then buy puts? If Hedge Ratio is +ve, then buy calls?
>Is Hedge Ratio = -1/delta = -Vo x n? Hedge Ratio = -1/delta = n/ Vo >If Hedge Ratio is -ve, then buy puts? If Hedge Ratio is –ve, then SELL (whatever option used as basis for calculation to derive at the correct n, can be put or call) as indicated by negative n (assuming positive V0) >If Hedge Ratio is +ve, then buy calls? If Hedge Ratio is +ve, then BUY (whatever option used as basis for calculation to derive at the correct n), as indicated by positive n (assuming positive V0) Delta is NEGATIVE for PUT and Positive for CALL.