Consider a stock paying continuous dividends of 1%. Assume r = 0.06, = 0.32 and todays stock price of S0 = 33. You sell 100 Calls with strike K = 35 and expiration in 68 days (assume 365 days in a year). You also construct a delta-hedge to manage your risk.

If tomorrow (1 day later) stock price rises to $34.50, find your net profit/loss from your hedged portfolio. Hint: dont forget about dividends!

Repeat this problem for the case of selling 100 Puts with strike K = 35 and all other parameters staying the same.