In order to hedge a short sale, which of the following basic option strategies would that investor follow?
A) buy a call.
B) write a call.
C) buy a put.
D) write a put.

Question

Quizplus · Accepted Answer

Buying a call option is a common strategy to hedge against a short sale because it gives the investor the right to purchase the underlying asset at a specified price, potentially limiting losses if the price of the asset increases.

In Order to Hedge a Short Sale, Which of the Following