  In this work, I address the issue of forming riskless hedge in the continuous
time option pricing model with stochastic stock volatility. I show that it is
essential to verify whether the replicating portfolio is self-financing, in
order for the theory to be self-consistent. The replicating methods in existing
finance literature are shown to violate the self-financing constraint when the
underlying asset has stochastic volatility. Correct self-financing hedge is
formed in this article.
