In the one-period binomial model, the hedge ratio is the number of shares of the underlying held per option in the replicating portfolio. In words, it matches the option’s payoff difference across up and down states with a stock-and-bond mix. Lightly: h = (c_u − c_d) / (S_u − S_d) for a call. It is not the same as a futures hedge ratio based on betas or durations.