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Level II
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Derivatives
Derivatives
Hard
A trader observes that 3-month implied volatility on Nexford Inc. stock is 32% while she expects realized volatility over the next 3 months to be 24%. To profit from this view, the trader should most likely:
A
Sell a delta-hedged straddle
B
Buy a delta-hedged straddle
C
Buy a long-dated call and sell a short-dated call
D
Enter a long variance swap
Select an answer to continue
Tags
#volatility-trading
#straddle
#delta-hedging
#implied-vs-realized
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