Hedging a long position in a stock is best accomplished by
A) Selling a put
B) Buying a put
C) Selling a call
D) Buying a call
E) Doing nothing

Name: Hedging a long position in a stock is best accomplished by A) Selling a put B) Buying a put C) Selling a call D) Buying a call E) Doing nothing
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Question

Quizplus · Accepted Answer

Buying a put option will allow the investor to profit from a decline in the stock's price, thereby reducing the potential loss on the long position.

Hedging a Long Position in a Stock Is Best Accomplished