Several months from now, you will make a large sale of copper. As such, you are exposed to movements in the price of copper between now and then. You will hedge this exposure using an option
contract.

Which option position will best hedge you
against unfavourable movements in copper price?

Question

Several months from now, you will make a large sale of copper. As such, you are exposed to movements in the price of copper between now and then. You will hedge this exposure using an option
contract.

Which option position will best hedge you
against unfavourable movements in copper price?

Answer

A short call option written on copper

Answer

A short put option written on copper

Answer

A long put option written on copper

Answer

A long call option written on copper

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Several months from now, you will make a large sale of copper. As such, you are ...

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