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Which trade would you make to protect your portfolio

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Reference no: EM13522362

You are implementing a portfolio insurance strategy using index futures designed to protect the value of a portfolio of stocks not paying any dividends. Assuming the value of your stock portfolio decreases, which trade would you make to protect your portfolio?

A. Buy an amount of index futures equivalent to the change in the call deltamtimes the original portfolio value.

B. Sell an amount of index futures equivalent to the change in the call deltatimes the original portfolio value.

C. Buy an amount of index futures equivalent to the change in the put deltatimes the original portfolio value.

D. Sell an amount of index futures equivalent to the change in the put deltatimes the original portfolio value.

Reference no: EM13522362

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