Question

What is the delta of a short position in 1,000 European call options on silver futures? The options mature in 8 months, and the futures contract underlying the option matures in 9 months. The current 9 -month futures price is $$\$ 8$$ per ounce, the exercise price of the options is $$\$ 8$$, the risk-free interest rate is $12 \%$ per annum, and the volatility of silver futures prices is $18 \%$ per annum.

   What is the delta of a short position in 1,000 European call options on silver futures? The options mature in 8 months, and the futures contract underlying the option matures in 9 months. The current 9 -month futures price is $$\$ 8$$ per ounce, the exercise price of the options is $$\$ 8$$, the risk-free interest rate is $12 \%$ per annum, and the volatility of silver futures prices is $18 \%$ per annum.
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Options, Futures, and Other Derivatives
Options, Futures, and Other Derivatives
John C. Hull 10th Edition
Chapter 19, Problem 10 ↓

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Step 1

We need to find the delta (\(\Delta\)) of a short position in 1,000 European call options on silver futures. The delta of an option measures how much the price of an option is expected to move per a one unit change in the price of the underlying asset. Here, the  Show more…

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What is the delta of a short position in 1,000 European call options on silver futures? The options mature in 8 months, and the futures contract underlying the option matures in 9 months. The current 9 -month futures price is $$\$ 8$$ per ounce, the exercise price of the options is $$\$ 8$$, the risk-free interest rate is $12 \%$ per annum, and the volatility of silver futures prices is $18 \%$ per annum.
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