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Delta hedge

Aannette7y ago
hi John, The normal formula is to divide number of shares by N(d1). However they sometimes divide number of shares by (N(d1) * contract size). Why do they multiply by contract size? Also why to hedge an amount we divide it by N(d1) *contract size. Is this a formula? thankyou
John MoffatJohn MoffatTutor7y ago#1
But I explain all this in my lectures!!! If there is a fixed contract size (which there is always likely to be) then we need to divide my the contract size in order to get the number of contracts.
Aannette7y ago#2
thankyou!
John MoffatJohn MoffatTutor7y ago#3
You are welcome :-)
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