Let the following data be given:

Delta (variation of the price of the option in relation to the price of the underlying) = 0.6; price of the underlying = 100; Value of a call on an underlying stock/security = 10; Value of this call on 100 shares = 1000.

Question 1: How can we cover the sale of 20 calls?

Question 2: How should the hedging of the position (purchase/sell) be changed?

Question 3: How many more shares?

Answer rating: 100% (QA)

Question 1 How can we cover the sale of 20 calls To cover the sale of 20 call options you would create a hedge by taking a long position in the underl... View the full answer