Hello all, I'm new to options and I just started to study them by reading Paul Wilmott's Book "Paul Wilmott introduces to Quantitative Finance".
My question is:
We know that the value of an options depends on the value of the underlying asset, the volatility, etc. So, is hedging the way that the value of the option stops depending on the value of the underlying asset, so we have less variables to care about?
For example, if our two only variables were price of the asset and volatility (to make it simple) we would hedge the option with the delta to depend just on the implied volatility and have a more predictable future, right?
Thanks all
My question is:
We know that the value of an options depends on the value of the underlying asset, the volatility, etc. So, is hedging the way that the value of the option stops depending on the value of the underlying asset, so we have less variables to care about?
For example, if our two only variables were price of the asset and volatility (to make it simple) we would hedge the option with the delta to depend just on the implied volatility and have a more predictable future, right?
Thanks all
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