Question
An investor is holding 2000 shares of technology index ETF, currently trading at $604 per share. He believes that technology stocks will outperform other shares,
An investor is holding 2000 shares of technology index ETF, currently trading at $604 per share. He believes that technology stocks will outperform other shares, but he is worried about a temporary drop in the market that might affect his portfolio due to its high beta of 2.4. Calculate the delta of one share in the tech ETF, if the market proxy is the SPY, currently trading at $280 per share. Use this information to determine how many SPY put options should the investor buy/sell, if the put's delta is -0.57.
Round your answer tot the nearest integer. Indicate a sale of puts with a negative sign (do NOT add a + sign for a purchase).
An investor is holding 2000 shares of technology index ETF, currently trading at $604 per share. He believes that technology stocks will outperform other shares, but he is worried about a temporary drop in the market that might affect his portfolio due to its high beta of 2.4. Calculate the delta of one share in the tech ETF, if the market proxy is the SPY, currently trading at $280 per share. Use this information to determine how many SPY put options should the investor buy/sell, if the put's delta is -0.57. Round your answer tot the nearest integer. Indicate a sale of puts with a negative sign (do NOT add a + sign for a purchase)Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started