You own 4,800 shares of a stock that is currently priced at $34 a share.Given this price,the option delta for a $30 call option on this stock is 0.955.How many $30 call option contracts do you need to hedge against a -$1 change in the price of the stock?
A) buy 50 option contracts
B) buy 503 option contracts
C) write 50 option contracts
D) write 503 option contracts
E) write 5,026 option contracts

Question

Quizplus · Accepted Answer

11ea6d0e_c3d4_e2f1_b3c7_df6cbd7c5c7e_TB1223_00 Number of option contracts = -5,026 / 100 = -50 contracts

You Own 4,800 Shares of a Stock That Is Currently