OPTION PRICING THEORY, IS RISK-FREE HEDGING FEASIBLE - COMMENT

In my comments on Gilster's article, I make the nexus between theory a nd practice my focus, examining risk measurement and risk management o n one hand and return calculations on the other. Gilster's point is ta ngled in a thicket compounded of instrument risk, position risk, and p ortfolio risk measures. In a real world context, the unrealism of the continuous time assumption and instability in the stock sensitivity of a neutral hedge do not matter; e.g., the specialist's position has a stable overall portfolio risk structure. Despite its promise, Gilster' s paper does not make a material contribution to the advancement of op tion theory or practice.