Is it selling a call a buying a put? I dont rember this definition appearing in Schweser, but encountered it in blue box questions. Could someone give me some feedback? Thanks in advance.
it is selling a put, buying a call
Yes but you’re also using options with a delta of 25, meaning that they are slightly out of the money (options with deltas of 50 are ITM). a 25 delta call has a “25% probability that the option will move ITM”.
Yes but you’re also using options with a delta of 25, meaning that they are slightly out of the money (options with deltas of 50 are ITM). a 25 delta call has a “25% probability that the option will move ITM”.
I thought that options with deltas 50 should be at the money. Are you sure?
For FX markets it’s short OTM put and long OTM call on the base currency of the P/B quote.
You’re right 50 delta is at the money. Typo!!