Working on the 7 material & just went over the Hedging Strategy section and my mind just exploded. I have no issues with Long Calls/ Puts or Short Calls/Puts but the hedging just completely threw me for a loop. Does anyone have any tips to make simply it? Any help would be appreciated.
Hi @Howard_Kuhn, try to break it down piece by piece - think of what happens with each option and position individually, and then combine them to see the end result. You can do it at multiple price points, higher and lower, to double-check the direction.
Every complex strategy is made of the same simple pieces!