Assume you purchase 3000 shares of stock at $70 per share and wish to hedge part of your position by buying a 200 share put contract. The option has a strike price of $65 and a premium of $2. If the stock is selling for $60 at the time of expirations, what is your overall net loss?

Answer rating: 100% (QA)

To calculate the overall net loss we need to consider the initial cost of purchasing the shares and ... View the full answer