📈Position Hedging Using Options

American-type options are used to hedge positions. Options have an hourly expiration date. The client pays the option price determined using the Black-Scholes model. For call options, the value determined from the model is a fair price. For put options, the model itself does not provide a correct valuation. However, it is used as a simple valuation method. The one-hour expiration ensures that the valuation does not significantly differ from valuations made using other methods, e.g., Monte-Carlo.

For the premium paid, the investor receives position insurance. The price of a short-term option is relatively low, amounting to a few per mille of the contract value. The investor decides on the duration of the position holding. The decision can be based on the adopted strategy. If they do not have funds, the position will be automatically closed.