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What kind of option position could take

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Problem 1: You sold short 100 shares of COTY stock some time ago at $35 per share. It is currently trading at $11 per share. You are willing to cover your purchase (buy back the shares) at $10 per share. What kind of option position you could take that would allow you to realize a capital gain if COTY falls and stays below $10 per share over the next month or collect an option premium and retain your short position if COTY stock increases to $12 per share in one month? Assume the cost of your option is $1 per contract. What is option position?

Reference no: EM133004864

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