u/DiscountedCashHoe

How do market makers correctly delta hedge their inventory? Is it strictly hedging each delta every movement? Say we have 100 delta short so I hedge long. 2 mins later it drops to 85 delta. Would a market makers rebalance immediately or is there a threshold they’re looking at?

How do market makers correctly delta hedge their inventory? Is it strictly hedging each delta every movement? Say we have 100 delta short so I hedge long. 2 mins later it drops to 85 delta. Would a market makers rebalance immediately or is there a threshold they’re looking at?