Metal bought or sold by the grantor of a call or put in order to cover potential risk. The more the price of the underlying asset moves in favor of the option purchaser, the higher the risk to the grantor that the option will be exercised against him.
A method used by option writers to hedge risk exposure of written options by purchase or sale of the underlying instrument in proportion to the delta.
A method of strategically counteracting exposures to option markets by buying or selling the underlying securities in proportion to the option's delta.
Delta hedging is the process in finance of setting or keeping the delta of a portfolio of financial instruments zero, or as close to zero as possible - where delta is the sensitivity of the value of a derivative to changes in the price of its underlying instrument.