I'm trying to understand delta hedging. If I sell a plain vanilla call option, in order to delta hedge it, I have to buy delta amount of stocks.

What I don't understand is that the BS price of the call is:

$C = SN(d_1) - e^{-rT}XN(d_2)$

I want the hedge portfolio to have the same value as the option price at any time. But the option price consits of 2 terms, not just the delta term.

What about the second term? Why don't I need it for hedging?

I'm trying to understand delta hedging. If I sell a plain vanilla call option, in order to delta hedge it, I have to buy delta amount of stocks.

What I don't understand is that the BS price of the call is:

$$C = SN(d_1) - e^{-rT}XN(d_2)$$

I want to construct the hedge portfolio which has the same value as the option price at any time. But the option price consists of 2 terms, not just the delta term.

What about the second term? Why don't I need it for hedging?

I'm trying to understand delta hedging. If I sell a plain vanilla call option, in order to delta hedge it, I have to buy delta amount of stocks.

What I don't understand is that the BS price of the call is:

$C = SN(d_1) - e^{-rT}XN(d_2)$

What about the second term? Why don't I need it for hedging?

I'm trying to understand delta hedging. If I sell a plain vanilla call option, in order to delta hedge it, I have to buy delta amount of stocks.

What I don't understand is that the BS price of the call is:

$C = SN(d_1) - e^{-rT}XN(d_2)$

I want the hedge portfolio to have the same value as the option price at any time. But the option price consits of 2 terms, not just the delta term.

What about the second term? Why don't I need it for hedging?