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[Think of it as insurance. When people decide to hedge, they are insuring themselves against a negative event. This doesn't prevent a negative event from happening, but if it does happen and you're properly hedged, the impact of the event is reduced. So, hedging occurs almost everywhere, and we see it everyday.](http://www.investopedia.com/articles/basics/03/080103.asp)

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So a classic delta-hedged portfolio on a call option is: $$-C - \Phi(d) \cdot B + \frac{d}{dS}C \cdot S = 0$$ How is risk of other Greeks hedged? Is it something like this? $$-C - \Phi(d') \cdot B + …
asked Feb 13 '21 by A.L. Verminburger
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$$C - \frac{P(z_{1})}{k(y, \tau)} \cdot S + \frac{P(z_{2})}{k(r,\tau)} \cdot F = 0$$ $$C - \Delta \cdot + w_{2} \cdot F = 0$$ OK, so with $\Delta$ I am hedging my directional risk, but what is $w_{2}$? …
asked Aug 8 '21 by A.L. Verminburger