You Are Long a Portfolio of Vanilla Call Options

question 38

Multiple Choice

You are long a portfolio of vanilla call options. Which of the following will help you hedge away your convexity (gamma) ?

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

---

Definitions:

Leader

An individual who guides or directs a group towards achieving goals by influencing or motivating members.

Delegation

The process of assigning responsibility and authority to others to carry out specific tasks while retaining overall accountability.

Authority

Authority involves the right or power to make decisions, to command, or to be recognized as a source of reliable information or expertise.

Organization

An arranged group of people with a particular purpose, such as a business, government body, charity, or club.