# Hedge Risk Mitigation

This section considers the influence of trading fees on risk-neutral pricing, denoted by the symbol.

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Using $$\phi\_k$$to represent the portion of the hedge acquired for a specific strike in a particular epoch, the return from "selling" it can be expressed as:

$$
APR\_k=12\times\left(\frac{1-c}{1-\phi\_k}\right),
$$

In order to maintain a no-arbitrage environment, the following relationship must hold:

$$
P\_k=\frac{\phi\_k}{1-c}.
$$

Please note that while the Annual Percentage Rate (APR) for selling a hedge may appear to be relatively high, there is always a probability $$P\_k$$ that the seller's entire position could be liquidated.