Introduction to the Hedge Submenu

The Hedge menu is designed to help the user calculate positions within the selected expiration chain to be directionally neutral. It is worth reviewing reference material, such as Wikipedia or Investopedia, before using this feature set.

Enter the submenu after choosing the desired expiration date by using the command, hedge, from the Options menu.

The Options Hedge Submenu

How to use the Hedge Submenu

The first step is to pick the underlying position for the calculation. Scroll the list populated by autocomplete, or type in the choice.

Picking underlying position

The strike prices for puts and calls are shown with the list command. Use this table to add or remove options from the calculation.

List of strikes

Add the first option with the corresponding index number for the strike price, attaching flags for a put and for short, -s & -p.

Adding Option A to the calculation

The rmv command removes added options. With an underlying position and two positions added, sop will display the results based on the inputs provided.

Position sizing for delta neutral

plot will display an options payoff chart, using the provided values.

Options payoff diagram

Examples

Substituting Option A for a different trade.

Hedge Example

Substuting Option B from the same example above.

Hedge Example

Moving Option B down one strike.

Hedge Example

Back to: Introduction To Options