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Consider a regular trading at $55. The implied volatility of 46 and 27 days to expiry, the 47.5 call would cost about $8.50. To own 10,000 shares, an investor would end up being invest over 1/2 of a million $. To control and enjoy the price action with this many shares, the options owner would have to pay just $85,000. Every $1.00 price move would result in $10,000 for that stock owner (or a 1.8% return on the original $550,000 investment) versus $9,200 for the options investor (or a 9.shop d8 super store online% return on the original $85,000 investment).

Here is an example of Delta Securing. Bob bought 1000 shares of Citibank for $3.5 per share on 7 January 2010. On 14 April, when Citibank was trading at $5, Bob determined that a resistance level has been reached. So he desired to perform a delta neutral hedge against short term price change while most people to profit if Citibank rally or fall strongly from . Bob bought 20 contracts of July $5 put to execute the delta neutral hedge. The delta of stock cancel out the delta of at the put options which is 0 delta.

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