An investor is taking a position on a stock S that results in the following payoff in, say, 1 year:

0 if ST < 90,

f(ST)= ST 90 if90

110 ST if 100 < ST .

1. 1 Describe the portfolio in terms of calls and/or puts.

2. 2 Suppose that, after a while, the investor starts feeling uneasy about losing too much money if S moves up too much. What could be done to put a limit to the potential losses? What would you do?