What is 'Delta Hedging'
Delta hedging is an options strategy that aims to reduce (hedge) the risk associated with price movements in the underlying asset by offsetting long and short positions. For example, a long call position may be delta hedged by shorting the underlying stock. This strategy is based on the change in premium (price of option) caused by a change in the price of the underlying security. The change in premium for each basispoint change in price of the underlying is the delta and the relationship between the two movements is the hedge ratio.
BREAKING DOWN 'Delta Hedging'
For example, the price of a call option with a hedge ratio of 40 will rise 40% (of the stockprice move) if the price of the underlying stock increases. Typically, options with high hedge ratios are usually more profitable to buy rather than write since the greater the percentage movement  relative to the underlying's price and the corresponding little timevalue erosion  the greater the leverage. The opposite is true for options with a low hedge ratio.

DeltaGamma Hedging
An options hedging strategy that combines a delta hedge and a ... 
Gamma Hedging
An options hedging strategy designed to reduce or eliminate the ... 
Delta Neutral
A portfolio consisting of positions with offsetting positive ... 
Delta
The ratio comparing the change in the price of the underlying ... 
Hedge
Making an investment to reduce the risk of adverse price movements ... 
Cross Hedge
The act of hedging ones position by taking an offsetting position ...

Trading
How Does Delta Hedging Work?
Delta hedging is a derivative trading strategy that attempts to reduce  or eliminate  the risk caused by price changes in the underlying asset. 
Trading
Options Trading Strategies: Understanding Position Delta
Learn more about the position delta hedge ratio and how it can tell you the number of contracts needed to hedge a position in the underlying asset. 
Personal Finance
Why Delta is Done Hedging Fuel Costs (AAL, DAL)
Delta lost $336 million on its hedges in the last three months of the year, and while it is not taking out any new contracts for 2016, the losses on existing contracts are expected to continue, ... 
Insights
Delta Loses a HalfBillion Dollars on Oil Hedging (DAL)
Delta Air Lines reportedly lost $450 million in the latest quarter on hedges that speculated the price of oil would rebound faster 
Managing Wealth
Offset Risk With Options, Futures And Hedge Funds
Though all portfolios contain some risk, there are ways to lower it. Find out how. 
ETFs & Mutual Funds
For Maximum Market Returns, Get Creative With Hedges
Proper hedges help to contain your losses while still allowing profits to grow. 
Trading
A Beginner's Guide To Hedging
Learn how investors use strategies to reduce the impact of negative events on investments. 
Trading
Getting To Know The "Greeks"
Understanding price influences on options positions requires learning about delta, theta, vega and gamma. 
Managing Wealth
Hedging Risk for Beginners: How and When to Do It
Hedging risk is always a good idea. Here is how sophisticated investors go about it. 
Investing
A Beginner's Guide To Hedging
Hedging is a practice every investor should know about.

What are the limitations of using delta to hedge options?
Learn about the delta of an option, how to delta hedge an option position and the limitations of using delta to hedge an ... Read Answer >> 
What industries typically use delta hedging techniques?
Learn what industries use delta hedging techniques for options trading, and understand how delta neutral trading strategies ... Read Answer >> 
What are common delta hedging strategies?
Learn about common delta hedging strategies, including how to make a position in options delta neutral by offsetting risk ... Read Answer >> 
How can you use delta to determine how to hedge options?
Learn what delta is, how to use delta to hedge options and how to maintain a deltaneutral position by deltahedging options ... Read Answer >> 
Is there a better metric for hedging options than delta?
Learn about delta and gamma hedging options, why gamma is a better metric to use to hedge and how gamma can be used with ... Read Answer >> 
Why does delta only range from 1 to 1?
Learn what the option Greek delta is, what affects the value of delta for an option and why the delta of an option can only ... Read Answer >>