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Posted on Aug 28, 2024

You have bought a call option with strike $ 2 0 on an asset which has a current spot price of $ 2 0 .

You have bought a call option with strike $

20

on an asset which has a current

spot price of $

20 .

In three months time the asset will either have price $

22

18 .

What position should you take in the underlying asset to hedge your option

position?

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