You Own 1,800 Shares of Textile Stock, Which Is Currently

question 39

Multiple Choice

You own 1,800 shares of Textile stock, which is currently, valued at $62 a share. The $65 put has a premium of $4.26 and a put delta of −.60. What position should you take in $65 put contracts to hedge your stock against a $1 decrease in price?

• A)buy 3 contracts
• B)buy 30 contracts
• C)buy 300 contracts
• D)write 3 contracts
• E)write 30 contracts

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Definitions:

Refractory Period

A period immediately following stimulation during which a nerve or muscle is unresponsive to further stimulation.

Liver-Damaging Disease

Conditions that impair liver function, potentially including viral hepatitis, fatty liver disease, and cirrhosis.

HBV

Hepatitis B Virus, a viral infection that attacks the liver and can cause both acute and chronic disease.

Sexual Contact

Physical interaction between individuals involving genitalia, often associated with the transmission of sexually transmitted infections (STIs).