How Can a Trader Achieve a Delta-Neutral Position Using Only Options? ⎊ Path

How Can a Trader Achieve a Delta-Neutral Position Using Only Options?

A trader can achieve a Delta-neutral position using only options by combining long and short positions in options with different Deltas, such that the sum of the Deltas of all positions is zero. For example, buying a certain number of ATM calls (Delta near 0.50) and selling a corresponding number of OTM calls (Delta near 0.20) can create a net Delta of zero.

This is a common practice in strategies like butterfly spreads.

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How Does a Constant Sum Market Maker (X+y=k) Differ from a Constant Product AMM?

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