To hedge a portfolio of BHP shares, we can buy a put option and at the same time take advantage of any upside movement in BHP share prices.

Name: To hedge a portfolio of BHP shares, we can buy a put option and at the same time take advantage of any upside movement in BHP share prices.
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Question

Quizplus · Accepted Answer

A put option provides downside protection while allowing the investor to benefit from any upside movement in the stock price, as the investor still holds the underlying shares.

To Hedge a Portfolio of BHP Shares, We Can Buy