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Question
Assume you purchase 200 shares of stock at $80 per share and wish to hedge part of your position by writing a 100 share option. The option has a strike price of $75 and a premium of $6. If at the time of expiration, the stock is selling at the following prices ($75, $80, $90) what will be your overall gain or loss?At $75, loss is $400.
At $80 loss is $600.
At $90 gain is $1,100.
Answer
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Related questions
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