Please explain & give me some example that how fund manager use option to hedge their stock portfolio from volatility of underlying asset by use these 4 strategy: long call option, short call option, long put option & short put option.
Please explain & give me some example that how fund manager use option to hedge their stock portfolio from volatility of underlying asset by use these 4 strategy: long call option, short call option, long put option & short put option.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Please explain & give me some example that how fund manager use option to hedge their stock portfolio from volatility of underlying asset by use these 4 strategy: long call option, short call option, long put option & short put option.
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Please correct my understanding, assume that expected stock that fund manager want to hedge is google stock...
Long Call - hedger plan to buy Google stock whether have or don't have Any Google stock in portfolio or not
Short Call - hedger must have google stock in portfolio
Long put - hedger must have google stock in portfolio
short put - hedger have or don't have google stock in portfolio
if I misunderstand,could you please explain and give some example
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