You Own 2,500 Shares of Jordan Co

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 -0.25.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