Multiple Choice
You own 2,500 shares of Jordan Co. stock, which is currently, valued at $38 a share. The $40 put has a premium of $2.25 and a put delta of −.25. What position should you take in $40 put contracts to hedge your stock against a $1 decrease in price?
A) buy 100 contracts
B) buy 1,000 contracts
C) buy 10,000 contracts
D) write 100 contracts
E) write 1,000 contracts
Correct Answer:
Verified
Correct Answer:
Verified
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