You Own 800 Shares of Bradley Co

question 6

Multiple Choice

You own 800 shares of Bradley Co.stock that is currently priced at $33 a share.Given this price,the option delta for a $35 call option on this stock is 0.66.How many $35 call options do you need to hedge against a -$1 change in the price of the stock?

• A) buy 1,212 options
• B) buy 1,813 options
• C) buy 1,847 options
• D) write 1,212 options
• E) write 1,847 options

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Definitions:

Up To Three Years

A phrase indicating a time frame or duration that does not exceed three years.

American Call Option

A type of options contract that gives the holder the right, but not the obligation, to buy a specified quantity of a security at a specified price within a certain time period.

Variance

A statistical measure that represents the dispersion of a set of data points or the degree of spread in a distribution.

Value Decrease

A decline in the worth or price of an asset or security.