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How Do Transaction Costs Affect the Frequency of Delta Hedging?

Transaction costs, such as trading fees and slippage, impose a constraint on the frequency of dynamic delta hedging. If costs are high, a market maker must hedge less frequently to maintain profitability, accepting a higher Gamma risk.

Conversely, low transaction costs allow for more frequent hedging, leading to a tighter, more accurate delta hedge but potentially higher execution volume.

How Do “Greeks” like Gamma and Vega Influence a Market Maker’s Spread Adjustments?
What Is “Gamma Risk” for Options Sellers and How Does It Complicate Hedging Strategies during Volatile Periods?
How Does High Gamma Lead to Higher Transaction Costs for a Delta Hedger?
How Does the Concept of ‘Greeks’ (E.g. Delta) Affect a Market Maker’s Quoting of the Options Spread?