When you are long an option and you delta hedge, you want A. traders talking a lot about other asset classes and ignore your underlying B. volatility to increase and the underlying to move around a lot C. the cost of carry to narrow D. volatility to decrease and the underlying to just stop moving

When you are long an option and you delta hedge, you want A. traders talking a lot about other asset classes and ignore your underlying B. volatility to increase and the underlying to move around a lot C. the cost of carry to narrow D. volatility to decrease and the underlying to just stop moving

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter16: Interest, Rent, And Profit

Section16.4: The Entrepreneur

Problem 1ST

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Question

When you are long an option and you delta hedge, you want

	A.	traders talking a lot about other asset classes and ignore your underlying
	B.	volatility to increase and the underlying to move around a lot
	C.	the cost of carry to narrow
	D.	volatility to decrease and the underlying to just stop moving

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