Delta hedging is an investment strategy used to reduce or eliminate the directional risk (or exposure to price movements) of an underlying asset. It involves offsetting the risk associated with an option or derivative position by taking an opposing position in the underlying asset. The "delta" represents the sensitivity of the option's price to changes in the price of the underlying asset.\ \ Investors use delta hedging primarily to manage the risk of their options portfolio. For instance, if an investor holds a call option, which gains value as the underlying asset rises, they can delta hedge by short-selling the underlying asset. By doing so, the changes in the asset's price are offset by the gains or losses in the option position, thereby neutralizing the overall exposure to price movements.\ \ Delta hedging is employed to maintain a more stable portfolio and protect against adverse market movements. It allows investors to lock in profits, limit potential losses, and ensure that the value of the options portfolio remains less sensitive to changes in the underlying asset's price. This strategy provides a degree of insurance against market volatility and helps maintain a more predictable and controlled risk profile within the investor's portfolio.\