How Can a Trader Use Vanna to Manage a Delta-Hedged Portfolio?

A trader can use Vanna to anticipate and manage the change in their Delta hedge as implied volatility fluctuates. If a Delta-hedged portfolio has positive Vanna, an increase in implied volatility will cause the Delta to become more positive, requiring the trader to sell the underlying asset to re-hedge.

By monitoring Vanna, the trader can proactively adjust the hedge, reducing transaction costs and slippage.