Suppose you have taken a short position on a call option. The strike price of the option
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Question:
Suppose you have taken a short position on a call option. The strike price of the option is 120 NGN (Nigerian Naira). At the time you took the position, the price of the underlying asset was 119 NGN. The option is written on 1000 units of the underlying asset.
What is the theoretical (optimal) total cost of the stop-loss hedging strategy (for options)?
Related Book For
Introduction To Corporate Finance
ISBN: 9781118300763
3rd Edition
Authors: Laurence Booth, Sean Cleary
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