You own 10,000 shares of ABC which is trading at $25.
ATM Calls are $8.50 with a Delta of .67
ATM Puts are 6.25 with a Delta of -.13.
How would you hedge your position using calls (each option
represents 100 shares)?
What are your total losses/gains if ABC trades at $20?
A. Write 149 calls; you have made $49,915
B. Sell 233 calls; you have gained $95
C. Write 149 calls; you have lost $85
D. Buy 149 calls; you have gained $85
You own 10,000 shares of ABC which is trading at $25. ATM Calls are $8.50 with a Delta of .67 ATM Puts are 6.25 with a D
-
answerhappygod
- Site Admin
- Posts: 899604
- Joined: Mon Aug 02, 2021 8:13 am
You own 10,000 shares of ABC which is trading at $25. ATM Calls are $8.50 with a Delta of .67 ATM Puts are 6.25 with a D
Join a community of subject matter experts. Register for FREE to view solutions, replies, and use search function. Request answer by replying!