Put options on the stock with one year to maturity

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Reference no: EM131838811

Would this be considered hedging? Why or why not?

1. An employee of Microsoft owns employee stock options in the company but his options are yet not vested. To avoid losses the employee short sells appropriate number of shares in the market.

2. Worried about the decline in the prices of BAC shares an individual buys a put options on the stock with one year to maturity.

Reference no: EM131838811

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