A Call Option on a Stock Has a Delta of 0.3.A

question 7

Multiple Choice

A call option on a stock has a delta of 0.3.A trader has sold 1,000 options.What position should the trader take to hedge the position?

• A) Sell 300 shares
• B) Buy 300 shares
• C) Sell 700 shares
• D) Buy 700 shares

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Definitions:

Financial Statements

Financial Statements are formal records of the financial activities of a business, person, or other entity, presenting the financial performance and position at a point in time and over a period.

Salvage Value

The projected remaining value of an asset upon reaching the end of its productive lifespan, utilized to compute depreciation.

Book Value

The net value of a company's assets minus its liabilities, often used to estimate the company's worth if it were liquidated.

Capital-intensive

Capital-intensive describes a business process or industry that requires large amounts of capital investment in heavy machinery and equipment to produce goods or services.