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The world of finance and investment is always associated with risk, and uncertainty is unavoidable, so it needs to be managed to minimize the level of risk.
Dynamic hedging refers to a hedging strategy that is flexible and can be changed according to time and market conditions, including volatility and price. Therefore, dynamic hedging is continuously adjusted to the hedged asset.
Currently, dynamic hedging is not only applied to traditional financial instruments like stocks but has also been implemented in crypto, particularly DeFi protocols, to maintain liquidity and token value stability.
Dynamic hedging refers to a hedging strategy that is flexible and can be changed according to time and market conditions, including volatility and price. Therefore, dynamic hedging is continuously adjusted to the hedged asset.
Currently, dynamic hedging is not only applied to traditional financial instruments like stocks but has also been implemented in crypto, particularly DeFi protocols, to maintain liquidity and token value stability.