Mr. Rohid purchased 10000 shares from Bombay stock exchange @ Rs 1000 per share. His...
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Mr. Rohid purchased 10000 shares from Bombay stock exchange @ Rs 1000 per share. His intention was to selling them at a higher price in later. But there is considerable uncertainty regarding the future movement of share price in stock market. The investor is having the possibility of incurring a loss by the declining of share price. How can Mr. Rohid avoid such risk and protect himself from the loss by hedging through financial derivatives? Discuss the possible losses and profits in the stock market.
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