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Today at 4:33 PM
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Delta of a call option is 0.85. Stock price is currently $50. How much money do you need to borrow to hedge a short position in 200 call contracts (each contract is for 100 shares of stock), provided that you finance the hedge entirely with borrowed funds

Answer :

Tundexi Tundexi

Today at 4:38 PM

Answer:

$850,000

Explanation:

Call contracts*Call option*Share of stock*Stock price

= 200*0.85*100*50

= $850,000

Thus, we need to borrow $850,000

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