A long position in a put option can be delta hedged by shorting delta units of...

A long position in a put option can be delta hedged by shorting delta units of the underlying. True or False.

Expert Solution

The given statement is FALSE because long position in the put option is equivalent to shorting the units of the underlying as both are taking the similar position so it is not a delta hedging.

Delta hedging would have been when, he would have bought the index when he was holding the put option.

The given statement is FALSE.

jeff jeffy answered 2 years ago

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