The delta of a put is -0.43. If the price of the underlying stock increases from...
- The delta of a put is -0.43. If the price of the underlying
stock increases from $40 to $44, the price of the put option:
- Increases by approximately 4.3%.
- Decreases by approximately 4.3%.
- Decreases by approximately $1.72.
Homework Answers
The Stock Price change in percentage = ( 44 - 40) / 40
= 0.10 or 10%
Now, The Delta of the put shows that the change in the Price of the put option due to the change in the share price,
So,Change in Price of Put Option = Delta of Put * Stock Price change
= 10% * -0.43
= -4.3%
The correct option is B
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