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What Is the Difference between Delta Hedging and ‘Vega Hedging’ in Options Risk Management?

Delta hedging manages price direction risk; Vega hedging manages implied volatility change risk, often using option spreads.
Greeks.Live10.11.25

What Is the Difference between Delta Hedging and ‘Vega Hedging’ in Options Risk Management?

Delta hedging manages directional risk (the risk of the underlying price moving) by keeping the portfolio's Delta near zero. Vega hedging, conversely, manages volatility risk (the risk of Implied Volatility changing) by keeping the portfolio's Vega near zero.

Vega hedging involves trading options with different Vega exposures, such as calendar spreads or vertical spreads, to offset the risk of IV increasing or decreasing.

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