Trading binary options isn’t just about making bets — it’s about managing the risks.
Delta Hedging
Delta measures how much an option’s price moves relative to the underlying asset. For binary options, delta explodes as MSTR nears the strike price.
Challenge: Rapid price changes can wipe out profits.Solution: Use dynamically adjusted vanilla options to neutralize delta exposure.
Gamma Management
Gamma measures how fast delta changes. It’s the second derivative of the option price, and it spikes near expiration.
Challenge: High gamma increases volatility in your portfolio.Solution: Add ATM (at-the-money) options or widen the call spread to smooth out spikes.
Bitcoin Correlation
MSTR’s strong link to Bitcoin means you’re not just trading a stock — you’re trading Bitcoin’s volatility.
Hedge: Use Bitcoin futures or options to manage the broader correlation risk.
