A trader uses delta hedging strategy to hedge a portfolio of short positions in call option on Apple Computer stocks. The trader sells 40 call option contracts (1 contract controls 100 shares) on Apple stock. The option price is $5, the stock price is $230, and the options delta is 0.8. Please choose all correct answers. Please note that each incorrect answer will reduce the score by 10%.

	1.	The trader will take a long position of 3200 shares in the stock to create a delta-neutral position.
	2.	The trader will take a long position of 4000 shares in the stock to create a delta-neutral position.
	3.	The trader will take a long position of 3500 shares in the stock to create a delta-neutral position.
	4.	The trader will take a short position of 3200 shares in the stock to create a delta-neutral position.
	5.	The trader will take a short position of 4000 shares in the stock to create a delta-neutral position.
	6.	Suppose the next day, the stock price increases to $240 and the delta changes to 0.85. To maintain the delta hedging posiiton, the trader will buy adidtional 200 shares.
	7.	Suppose the next day, the stock price increases to $240 and the delta changes to 0.85. To maintain the delta hedging posiiton, the trader will buy adidtional 300 shares.
	8.	Suppose the next day, the stock price increases to $240 and the delta changes to 0.85. To maintain the delta hedging posiiton, the trader will buy adidtional 400 shares.
	9.	Suppose the next day, the stock price increases to $240 and the delta changes to 0.85. To maintain the delta hedging posiiton, the trader will sell adidtional 200 shares.
	10.	Suppose the next day, the stock price increases to $240 and the delta changes to 0.85. To maintain the delta hedging posiiton, the trader will sell addidtional 300 shares.