Question: 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
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
Step by Step Solution
3.45 Rating (142 Votes )
There are 3 Steps involved in it
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 full answer
Get step-by-step solutions from verified subject matter experts
