Hello,
I read the chapter and the notes on this topic and and had a couple of questions. The pure math of it makes sense, (just partial derivatives) but what do these terms (p 30 and 32) mean in the real world and how exactly are they used for hedging?
I read that the cross gamma term has to do with the change in the delta of one factor while the other factor changes. Is this how we are supposed to interperet this? It seems like mathematical trickery because nothing about correlations is mentioned
Trying to wrap my head around how to interprate of all of these terms is making my head hurt
.
Thanks!
Shannon
I read the chapter and the notes on this topic and and had a couple of questions. The pure math of it makes sense, (just partial derivatives) but what do these terms (p 30 and 32) mean in the real world and how exactly are they used for hedging?
I read that the cross gamma term has to do with the change in the delta of one factor while the other factor changes. Is this how we are supposed to interperet this? It seems like mathematical trickery because nothing about correlations is mentioned
Trying to wrap my head around how to interprate of all of these terms is making my head hurt
.Thanks!
Shannon
