- If the put is in-the-money and the hedge is lifted prior to the put’s maturity,the forfeited profit will be an amount somewhat less than the premium paid,as the option will retain its time value. what does “lifted” mean??? 2. when the futures contract is longer (i.e. has a longer maturity)than the desired holding period , the investor must reverse at the end of the holding period at the existing futures price. what does" reverse"mean? thx!
- Lifted - the hedge is removed (put is sold) prior to maturity. 2. Reverse - The futures contract is “reversed”, meaning that hedger goes long (on equivalent contract) to cover a short futures contract, or goes short to cover a long futures contract.
thx a lot !!!