Why does hedging a short call option involve a buy high, sell low strategy? Hint: How do

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Why does hedging a short call option involve a "buy high, sell low" strategy?
Hint: How do you hedge a short call position? What happens to the amount of hedging instrument that you would need as the price of underlying increases or decreases

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Fundamentals of Financial Management

ISBN: 978-0324597707

12th edition

Authors: Eugene F. Brigham, Joel F. Houston

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Posted Date: Mar 11, 2024 12:20 PM

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Why does hedging a short call option involve a buy high, sell low strategy? Hint: How do

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Hedging a short call option might appear to be a buy high sell low strategy on the surface but its a misconception when considering the overall portfo... View the full answer

Fundamentals of Financial Management

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