Chapter 02 · Section 2.1

Long - IMM Calls 1

Suppose Victor entered a long position in 4 IMM March 45 DM calls in December. Now it is February, and the Deutsche Mark trades at $.45/DM.

Victor can offset (liquidate) his options position by selling:

• a) 4 IMM March 45 DM calls.
  Yes. Victor owns 4 March 45 calls, so he writes an equal number of identical options -- 4 March 45 calls -- to liquidate his position. Continue
  b) 4 IMM March 45 DM puts
  c) 4 IMM February 45 DM calls.
  d) 4 IMM February 45 DM calls.

(Click here for help)