Julia S.

asked • 05/13/20

Understanding investing in options, how to deal with risks with put and call options

1.    Suppose you own the following stocks in your portfolio at equal weights:

AMZN (Amazon)

JPM (JPMorgan)

PFE (Pfizer)

BA (Boeing)

DIS (Disney)

a) Assuming you want to protect only TWO of them for dropping 20% in price from today's close over the next 3 months - September 2020

b)  Also assume you also want to double up your exposure to ONE of them if its price drops by at least 15% from its current level.

Show the hedging strategies (Puts or Calls) you are willing to buy in order to accomplish (a) and (b). Name the companies and select the Puts/Calls with respect to Expiration Date, Strike, Implied Volatility, $-Cost

I am learning to navigate Yahoo Finance options page, but how do we learn how to invest in the right options. Learning with real companies is much more useful than reading hypotheticals

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