EOC question 19 in swaps reading has a dealer taking the opposite side to a covered call position. So he is long the call. Why is the delta positive ? and therefore hedged by going short the underlying ? Anyone help ?
Covered Call : Buy Underlying, Sell Call so yes, if he is taking the opp. side he is Buying the Call
I agree. But why is the delta positive in this case ?
long call = positive delta. price goes up -> call goes up. What’s the confusion?