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Delta Neutral
A portfolio position structured to be largely unaffected by the underlying asset's price movement.
A delta-neutral position is structured, generally by combining offsetting long and short exposures, so its overall value is largely unaffected by small movements in the underlying asset's price.
This is commonly used by strategies seeking to profit from something other than directional price movement, such as a funding rate or a volatility difference, while minimizing exposure to price direction itself.
Examples
- A delta-neutral strategy might combine a spot holding with an offsetting short position to cancel out price-direction risk.
- Delta-neutral positions still carry risks beyond price direction, such as funding-rate or execution risk.