How must you hedge discretely
How must you hedge discretely?
Expert
First, acquire your delta correct, and this implies use the correct formula and estimates for parameters, like volatility. Second, decide while to hedge based on the conflicting desires of wanting to hedge as frequently as possible to reduce risk, but so little as possible to decrease any costs related with hedging.
Suppose current settlement price on a CME DM futures contract is $0.6080/DM. You contain a long position in futures contract. Presently your margin account contain a balance of $1,700. The next three days' settlement prices are $0.6066, $0.6073, & $0.598
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