How frequently should you consider rebalancing the options hedge on a large equity portfolio if you wish to maintain an effective hedge?
A)weekly
B)annually
C)just prior to the fiscal year end
D)at option expiration
E)only when the options are in the money

Question

Quizplus · Accepted Answer

To maintain an effective hedge, it is important to rebalance the options hedge on a regular basis. Weekly rebalancing allows for adjustments to be made in response to changes in the underlying equity portfolio and market conditions. This helps to ensure that the hedge continues to provide adequate protection against adverse movements in the equity markets.

How Frequently Should You Consider Rebalancing the Options Hedge on a Large