[Belinda]

Hi sir,

(June 2014 Q1 option contracts)

For exercise price US$1.06/CHF1, 38.19 put contracts needed, so we purchase 38 contracts meaning there will be amount not hedged. However, for exercise price US$1.07/CHF1, 37.83 put contracts needed, but 38 contracts are purchased meaning there will be amount over-hedged. When do we apply under-hedge or over-hedge? Or, it does not matter and I can calculate “amount not hedged” for both exercise prices?

Thank you

[Author]

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