what is delta gamma hedging 
delta gamma hedging is an options strategy it is closely related to delta hedging in delta gamma hedging delta and gamma hedges are combined to cut down on the risk associated with changes in the underlying asset it also aims to reduce the risk in the delta itself remember that delta estimates the change in the price of a derivative while gamma describes the rate of change in an option s delta per one point move in the price of the underlying asset the bottom lineoptions traders have a range of strategies to help mitigate the risks involved with these investments one of these is delta hedging when a trader uses this strategy their goal is to reduce the directional risk associated with price movements of the underlying asset this is accomplished by buying or selling options and offsetting the risk by buying or selling the same amount of shares of a company s stock or etf although it can be an advantageous strategy for those who know how to use it traders should be aware that it does require constant monitoring and can be fairly expensive 