Assume an investor is long 10 shares of stock abc and the, Ask an Expert

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Assume an investor is long 10 shares of stock ABC, and the stock is currently trading at $47 per share. The investor wants to temporarily hedge the position due to the increase in the overall market's volatility. Therefore, the investor purchases 10 put options with a strike price of $45 and a premium of $2; writes 10 call options with a strike price of $60 and a premium of $1.5.

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Financial Management, Finance

Category:- Financial Management
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