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# You know how to solve this problem?

Discussion in 'Options' started by clarodina, Nov 26, 2012.

1. ### clarodina

A call option price is 1.6 and B call option price is 1.0.

Both A and B are different products and A price is only avail on 1600 and B price is only avail on 1800.

Long 100 contracts of A and short 100 contracts of B at 1.6 and 1.0 repsectively. The ratio is 1.6. THe problem : How to maintain the ratio of 1.6 the next day when prices move? A price is avail before B and say A price fall and you choose to long more but you don't know B price which is 2hrs less on 1600. Say you long addition 1000 dollar for A. When B price on 1800 short 100 dollar for B would not make the ratio equal to 1.6. Using different dollar would make the ratio equal but the dollar exposure would be different. Anyone?

2. ### diaoptions

My motto is "you can't have your cake and eat it too". Perhaps you could think about that for awhile.

3. ### gkishot

Are u sure you calculate ratio correctly? I say the ratio should be determined by the dollar amount of the underlying stocks ( stock price * 100 contracts).

4. ### clarodina

both are 100 contracts