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hi John,
The normal formula is to divide number of shares by N(d1).
However they sometimes divide number of shares by (N(d1) * contract size). Why do they multiply by contract size?
Also why to hedge an amount we divide it by N(d1) *contract size.
Is this a formula?
thankyou
But I explain all this in my lectures!!!
If there is a fixed contract size (which there is always likely to be) then we need to divide my the contract size in order to get the number of contracts.
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