While finding contracts 2 delta hedge d portfolio y do we use -1/delta of call or put…
Remember that:
delta = Δoption price / Δunderlying price.
A little algebra gives us:
Δunderlying price = Δoption price / delta = Δoption price × (1 / delta).
Because the idea of a delta hedge is to counteract the price change of the underlying, we want a price change for our options to be:
-Δunderlying price = Δoption price × ( -1 / delta ).
Voilà!
Thx mate…
My pleasure.