Right magician. Thanks for your insights. Just one more thing. If we had to calculate the number of shares required to hedge, that should be -delta * number of options that the trader initially sold. Now delta of put options is negative which gives us a positive number for the number of shares to hedge. Does this still imply that the trader needs to SHORT these many shares since he initially SOLD the put options?
It depends on whether you’re delta hedging, or fully hedging. For delta hedging, you’re correct.
Great. Thanks a lot!