You Hold a Portfolio Consisting of 300 Calls (Short) and 200

question 4

Multiple Choice

You hold a portfolio consisting of 300 calls (short) and 200 puts (long) on a given stock. The delta of the calls is $+ 0.62$ and the delta of the puts is $- 0.57$ . To delta hedge this portfolio, you should

• A) Short 74 shares of the stock.
• B) Buy 300 shares of the stock.
• C) Buy 500 shares of the stock.
• D) Buy 74 shares of the stock.

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