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by jawilson2
1906 days ago
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Let's say I have 1000 shares of MSFT that I can't sell for 1 year, but I'm worried the stock might drop. I can buy puts to hedge against the price dropping, and the strike price determines how much loss I'm willing to accept, and the corresponding premium I need to pay. If the price in 1 year increased, I'm only out the premium for the 10 puts I bought, otherwise I can exercise them. |
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