You accepted a job at Facebook for $$50,000$ salary and received $200$ shares as an incentive bonus. You believe that Facebook stock will decline in the next $3$ months because of FTC regulation on its technology. Which of the following scenarios is the best way to hedge your stock position risk.

Facebook stock is currently trading at $$275$

$1$ stock option is for $100$ shares.

Your salary is $$50,000$ before tax

Calculate your net position for each of the following strategies and then determine the best hedge strategy for your Facebook stock risk.

Buy $2$ puts at the money today for expiration in $3$ months, premium is $$18.$

Sell $2$ puts with a strike of $$250$ today for expiration in $3$ months, premium is $$9.$

Buy $2$ calls at the money today for expiration in $3$ months, premium is $$18.$

Group of answer choices

Buy $2$ puts at the money today for expiration in $3$ months, premium is $$18.$

Buy $2$ calls at the money today for expiration in $3$ months, premium is $$18.$

Sell $2$ puts with a strike of $$250$ today for expiration in $3$ months, premium is $$9.$