OpenBB/assets/js/63a2604e.4861353e.js

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Enter the submenu after choosing the desired expiration date by using the command, hedge, from the Options menu.",source:"@site/content/terminal/guides/intros/stocks/options/hedge.md",sourceDirName:"guides/intros/stocks/options",slug:"/guides/intros/stocks/options/hedge",permalink:"/terminal/guides/intros/stocks/options/hedge",draft:!1,editUrl:"https://github.com/OpenBB-finance/OpenBBTerminal/edit/main/website/content/terminal/guides/intros/stocks/options/hedge.md",tags:[],version:"current",frontMatter:{title:"Hedge",keywords:["Options","stocks","derivatives","puts","calls","oi","vol","greeks","hedge","gamme","delta","theta","rho","vanna","vomma","phi","charm","iv","volatility","implied","realized","price","last","bid","ask","expiry","expiration","chains","chain","put","call","strategy"],excerpt:"This guide introduces the Hedge submenu, within the Options menu, providing examples in use."},sidebar:"tutorialSidebar",previous:{title:"Options",permalink:"/terminal/guides/intros/stocks/options/"},next:{title:"Options Pricing",permalink:"/terminal/guides/intros/stocks/options/pricing"}},p={},l=[{value:"How to use",id:"how-to-use",level:3},{value:"Examples",id:"examples",level:3}],c={toc:l};function u(e){let{components:t,...n}=e;return(0,r.kt)("wrapper",(0,i.Z)({},c,n,{components:t,mdxType:"MDXLayout"}),(0,r.kt)("p",null,"The Hedge menu is designed to help the user calculate positions within the selected expiration chain to be directionally neutral. Enter the submenu after choosing the desired ",(0,r.kt)("a",{href:"/terminal/reference/stocks/options/exp",target:"_blank",rel:"noreferrer noopener"},"expiration")," date by using the command, ",(0,r.kt)("inlineCode",{parentName:"p"},"hedge"),", from the Options menu."),(0,r.kt)("p",null,(0,r.kt)("img",{parentName:"p",src:"https://user-images.githubusercontent.com/85772166/172286199-ec6e202d-4955-4557-9ba6-7d4db6fbdd55.png",alt:"The Options Hedge Submenu"})),(0,r.kt)("h3",{id:"how-to-use"},"How to use"),(0,r.kt)("p",null,"The first step is to pick the underlying position for the calculation. Scroll the list populated by autocomplete, or type in the choice."),(0,r.kt)("p",null,(0,r.kt)("img",{parentName:"p",src:"https://user-images.githubusercontent.com/85772166/172286267-9c164764-271f-4847-adc7-52bfb82e1138.png",alt:"Picking underlying position"})),(0,r.kt)("p",null,"The strike prices for puts and calls are shown with the ",(0,r.kt)("inlineCode",{parentName:"p"},"list")," command. Use this table to add or remove options from the calculation."),(0,r.kt)("p",null,(0,r.kt)("img",{parentName:"p",src:"https://user-images.githubusercontent.com/85772166/172286323-62e69fe1-dc37-42a1-8fdb-d3287ff0ac38.png",alt:"List of strikes"})),(0,r.kt)("p",null,"Add the first option with the corresponding index number for the strike price, attaching flags for a put and for short, ",(0,r.kt)("inlineCode",{parentName:"p"},"-s")," & ",(0,r.kt)("inlineCode",{parentName:"p"},"-p"),"."),(0,r.kt)("p",null,(0,r.kt)("img",{parentName:"p",src:"https://user-images.githubusercontent.com/85772166/172286367-a15f57fe-a10f-402c-9bf6-5e7dd34dedb4.png",alt:"Adding Option A to the calculation"})),(0,r.kt)("p",null,"The ",(0,r.kt)("inlineCode",{parentName:"p"},"rmv")," command removes added options. With an underlying position and two positions added, ",(0,r.kt)("inlineCode",{parentName:"p"},"sop")," will display the results based on the inputs provided."),(0,r.kt)("p",null,(0,r.kt)("img",{parentName:"p",src:"https://user-images.githubusercontent.com/85772166/172286429-a0d6710d-a5a0-49e5-9938-f3b9aaebb236.png",alt:"Position sizing for delta neutral"})),(0,r.kt)("p",null,(0,r.kt)("inlineCode",{parentName:"p"},"plot")," will display an options payoff chart, using the provided values."),(0,r.kt)("p",null,(0,r.kt)("img",{parentName:"p",src:"https://user-images.githubusercontent.com/85772166/172286525-4ede89ec-4ed7-4843-a0fa-ec306efe3b67.png",alt:"Options payoff diagram"})),(0,r.kt)("h3",{id:"examples"},"Examples"),(0,r.kt)("p",null,"Substituting Option A for a different trade."),(0,r.kt)("p",null,(0,r.kt)("img",{parentName:"p",src:"https://user-images.githubusercontent.com/85772166/172286582-1f5e153a-a900-427a-a7fc-f596648de599.png",alt:"Hedge Example"})),(0,r.kt)("p",null,"Substuting Option B from the same example above."),(0,r.kt)("p",null,(0,r.kt)("img",{parentName:"p",src:"https://user-images.githubusercontent.com/85772166/172286627-0f6f6a60-d76c-4e24-9fdd-8e65e137097e.png",alt:"Hedge Example"})),(0,r.kt)("p",null,"Moving Option B down one strike."),(0,r.kt)("p",null,(0,r.kt)("img",{parentName:"p",src:"https://user-images.githubusercontent.com/85772166/172286669-82a98127-fe74-43fd-bcc9-ed874f746bdc.png",alt:"Hedge Example"})))}u.isMDXComponent=!0}}]);