Your new client is short 1,000 shares of PQRS stock. He feels strongly that it will decline in the future, but is concerned about a short term price spike from an earnings release. Which strategy do you suggest for your new client?

Buy 10 PQRS calls

Buy 1 PQRS call

Sell 10 PQRS puts

Sell 1 PQRS Call

Each option contract covers 100 shares. He needs to buy 10 calls to hedge his 1000 share position.

$ 0

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