You own 1,000 shares of XYZ and have purchased ten protective put contracts. The puts have a data of -0.317.
a.)What is your position delta?
b.)Instead of buying puts, how many of your shares should you sell short to achieve the same results?
Question
Solution Preview
This material may consist of step-by-step explanations on how to solve a problem or examples of proper writing, including the use of citations, references, bibliographies, and formatting. This material is made available for the sole purpose of studying and learning - misuse is strictly forbidden.
Answer:Delta of the shares = 1.
Delta of puts = -0.317
Each put contract is based on 100 shares and so the put position comprises of 100 * 10 = 1000 shares....
Return to homework library