Series 3: 4.3.2.2.1. Hedging Vs. Speculative Options Strategies

Taken from our Series 3 Online Guide

4.3.2.2.1. Hedging vs. Speculative Options Strategies

SUMMARY TABLE

Hedging Long and Short Positions

Underlying Asset

Hedge

Strategy

Long

Long (protective) put

Protects long positon from falling prices

Long

Short (covered) call

Income with partial hedge of falling prices

Short

Short (covered) put

Income with partial hedge of rising prices

Short

Long (protected) call

Protects short position from rising prices

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