A call option can be used to hedge the risk of a price rise in the underlying asset.

Name: A call option can be used to hedge the risk of a price rise in the underlying asset.
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A call option gives the holder the right to buy the underlying asset at a fixed price (known as the strike price) before the expiration date. If the price of the underlying asset increases, the holder can exercise the option and buy the asset at the lower strike price, thus hedging against the price rise.

A Call Option Can Be Used to Hedge the Risk