> For the complete documentation index, see [llms.txt](https://optifi.gitbook.io/optifi/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://optifi.gitbook.io/optifi/optifi-in-depth/optifi-market-maker-omm/delta-neutral-hedging.md).

# Delta-Neutral Hedging

This section illustrates how OptiFi Market Maker (OMM) achieves [Delta-Neutral](/optifi/option-101/glossary/hedge.md).

Take a BTC Option Vault as an example:

1. **Orderbook Management**: Dynamically update [orderbook pricing](/optifi/optifi-in-depth/optifi-market-maker-omm/omm-orderbook-pricing.md) based on delta level
   * When OMM is overexposed, Delta > 0, it will reduce the amount of BTC options it is willing to buy calls (or sell puts)
   * When OMM is underexposed, Delta < 0, it will reduce the amount of BTC options it is willing to sell calls (or buy puts)
2. **Risk Management**: Use Futures to hedge

   Once Delta Mismatch occurs, OMM will automatically hedge the whole portfolio through [Mango](https://www.mango.markets/) Futures Market, to make sure the delta is under a manageable level at nearly to zero.

This way, OMM will:&#x20;

* Provide better than mid-price buy sell prices when it needs to source delta hedges&#x20;
* Create more **competitive pricing** and **attract liquidity** to the futures market as well as help balance flows between options and futures

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