Consider at-the-money European call and put option, both with time to maturity of 3-months and same exercise price of $400. The calculations show that the delta of the put option is -0.60.

You have just taken a short position in 10,000 call options (i.e., you have sold 100 contracts). What action will you take to make portfolio delta-neutral. Complete the following sentence. "To make my portfolio delta-neural, I will.........." *

Suppose that within minutes after you shorted above options and delta-hedged your portfolio, the stock price decreases somewhere between $20-$50 dollars (the exact amount is unknown). Which of the following is most likely to be correct if the you wish to preserve the the delta neutrality? *