You Are Long a Portfolio of Vanilla Call Options

question 35

Multiple Choice

You are long a portfolio of vanilla call options.Which of the following will help you hedge away your theta risk?

• A)Buying a portfolio of in-the-money cash-or-nothing call options.
• B)Buying a portfolio of out-of-the money cash-or-nothing call options.
• C)Buying a portfolio of in-the-money vanilla call options.
• D)Buying a portfolio of out-of-the money vanilla call options.

---

Definitions:

Parallel Conversion

A method of implementing a new system where the old and new systems run simultaneously for a period of time to ensure the new system works correctly.

Old Systems

Outdated or legacy technology and processes that are still in use within an organization.

End-user Development

The practice of allowing end-users, who are not professional developers, to create or modify software applications.

IT Department

A division within an organization tasked with maintaining and implementing technology solutions.