On May 13, 2015, an investor owns 100 Google shares. As indicated in Table 1.3, the bid share price is $532.20 and a December put option with a strike price of $500 costs $22.10.

The investor is comparing two alternatives to limit downside risk. The first involves buying one December put option contract with a strike price of $500. The second involves instructing a broker to sell the 100 shares as soon as Google’s price reaches $500. Discuss the advantages and disadvantages of the two strategies.