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A delta-hedging principle involves taking the opposite direction, i.e., short and long, to hedge against financial risk. An example is longing an option call and selling (shorting) the borrowed the delta amount of the underlying assets.

If the asset price rises, we can make a profit by exercising the option. If the asset price falls, we can profit from the price difference.

Can we do the same with longing put option and shorting the asset?

poglhar
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    First of all, the point of (delta) hedging is not to make a profit or loss from the total position option + hedge. As the point of delta hedging is not to have any profit or loss, it is equivalent to saying that the point of delta hedging is to replicate the payoff of the option. As a long put has negative delta, if you go long a put then you need to buy the asset to delta hedge. – Frido Jul 25 '23 at 09:35

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