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A stock is trading at $30 and an options trader sells a three month European put option on the stock with an exercise price of

A stock is trading at $30 and an options trader sells a three month European put option on the stock with an exercise price of $30 for $2. The put option has a delta of -0.40. Explain how a delta hedging strategy will immunise the trades portfolio against a $0.10 reduction in the stock price

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