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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AFM Exams › Daikon co (jun 15)
In b part please explain the option part
How will selling the option increase the value?
I mean we have hedged it so why we will sell before expiry?
What is meant by exercising here then?
They are not selling the option.
The option is the right to sell futures and if they exercise the option then they will sell futures and the exercise price (and buy the futures at whatever the price of the futures is on the exercise date).
Have you watched my free lectures on this?
