alleryStart learning →A trader holds 50 call contracts of 100 shares each, each with delta 0.6. The position acts like how many shares?
A300 shares
B5,000 shares
C30 shares
D3,000 shares
Answer & Solution
Correct answer: D. 3,000 shares
Total options are 50 x 100 = 5,000, and at delta 0.6 they move like 3,000 shares.
Keep practising Option (Finance)
Browse all Option (Finance) questions for CA Final, or explore more Strategicfinancialmanagement topics.
Related questions
When is charm especially useful for a delta-hedger?Which Greek is most important for an at-the-money straddle?Speed measures the change in gamma with respect to what?Which Greek is also known as vega convexity?Which Greek is called delta decay?Gamma is classed as which kind of Greek?Which Greek measures sensitivity to the interest rate?Which Greek measures the time decay of an option?