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You Are Short a Put On ABCA B C Stock and Have Delta-Hedged Yourself Using the Stock

Question 6

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You are short a put on ABCA B C stock and have delta-hedged yourself using the stock. The delta of the put is 0.71- 0.71 and the gamma of the put is +0.04+ 0.04 . If the price of the underlying registers an increase of $0.50, to maintain your delta-hedge, you must


A) Sell 0.04 units of the stock.
B) Buy 0.04 units of the stock.
C) Sell 0.02 units of the stock.
D) Buy 0.02 units of the stock.
E) None of the above.

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