The idea
Delta is the first-order sensitivity of the option to the underlying. A +0.40 delta call behaves, locally, like being 40% long the notional (in the model’s units). Selling 0.40 of matching perp or future offsets that local exposure so P&L is driven more by gamma, theta, and vega than by a small spot tick.
“Locally” is the word. Gamma changes delta as spot moves. Charm changes delta as time passes. You cannot set a hedge once on a short-dated ATM option and walk away.
What you actually trade for the hedge
Crypto desks usually hedge with perpetual futures or dated futures on the same venue or a correlated venue. That introduces basis (perp versus options index) and funding (periodic perp payments). A “perfect” delta hedge with a noisy perp is still a basis trade.
Contract size must match the option multiplier. Mixing linear option delta with inverse perp contracts without converting units is how hedges silently double.
Gamma scalping — the honest version
Long options + short delta: as spot swings, you buy low and sell high on the hedge if you rebalance with the gamma. That is the textbook story. It requires realized movement, affordable spreads, and that IV does not collapse faster than you earn. Short options + long/short hedge is the opposite: you pay to rebalance when the market trends.
It is not free money. Weekend gaps skip your rebalance. Liquidations skip your thesis.
How often to rebalance
Too often: you donate bid/ask and fees. Too rarely: you are just directional. Professionals use bands (rehedge when delta drifts by X) rather than every tick. There is no universal X. Near expiry ATM, bands must be tighter because gamma is large.
If you cannot monitor the book, do not run an active hedge on front-week shorts.
Risks unique to crypto
Funding can dominate a short-horizon hedge. Auto-deleveraging and insurance-fund events can hit the perp side. Options and perps may halt or widen at different times. Venue A options versus venue B perp adds withdrawal and credit risk.
GEX narratives describe aggregated dealer-style hedging, not your personal hedge schedule.
Practice this on OptionsMatch
Read delta/gamma on /t/btc/greeks and strike insight. Perp context on /t/btc/futures and /t/btc/basis. This site will not place the hedge for you — that is the venue.
Advanced mechanics, educational only.