The liquidation of an option position while at the same time taking an essentially equivalent position in an option with a lower strike price. For example, an investor may sell an option with a USD 7 strike price and repurchase an identical option (in terms of underlying asset and expiration date) with a USD 5 strike.
Derivatives
Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
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