Could somebody explain the statement (from CFAI volume 5 page# 132) “in a down market a put option would provide less protection than outright short position”
A short position would have a delta of one. A put depending on strike and time value may have a delta close to 1 but not as large as an out right short…An out of the money put could have a delta far less than an outright posn depending how far out of the $, which would obviously make it far less effective than an out right short.