TSLA Stock: SIMPLE HEDGE in 2 minutes #tslastock (Video)

on hedging strategy says Sam whether it uh be for spy or an individual stock so I've talked before and I want to start making more Evergreen videos which means you know not just daily analysis but videos you guys can continue to watch um as far as my hedging strategies there's a couple of ways you can do it on any options that you see you're going to have a Delta whether you have calls or puts if you have a negative Delta then that means obviously you have puts if you have a regular Delta you have calls the way that you hedge a position is you equal out the amount of Delta entirely so if I own let's just say like I'm going to go into my bar replay right here and let's just say that I go and I buy 100 shares right now of Tesla my Delta is 100 because one share equals 1 Delta so if you look at your calls right now and it's like plus 85 Delta that means for every single share or every single options contract that you own it is equivalent to owning 88 shares of Tesla that's what your exposure is which is kind of cool so you can actually like now if you're someone with a smaller account you're like oh dude like I you know I got 100 or I'm sorry like you know 100 Delta maybe I have two calls that are 50 Delta a piece right two calls at 50 Delta a piece two of those contracts at a 50 Delta that's going to be a Delta of one or you know 1.0 so that means you would basically have a Delta of of of one and so what you're going to do is you're going to well times 100 so you'd have 100 Delta cuz you know you have 100 times that contract so if you had a Delta entirely of 100 then in order to actually head your position you'd have to go short 100 shares if your Delta was 48 you'd have to go short 48 shares to have the same equal position and that's called Delta hedging which I I I know a lot of you guys asked about uh me doing Market maker uh videos and the way the market makers make their money is they stay delta neutral and you can actually make a lot of money being delta neutral if you uh are a market maker because you're facilitating deals and you're making money off of volatility which is not something I ever hear anybody talk about uh on YouTube when it comes to trading and investing um so I think that's something I can definitely share with you guys but overall I'm usually going to be delta neutral by adding puts into my position or I could just short chairs if I really wanted and I