A reverse hedge changes all unfavourable stock outcomes into a constant hedge loss, and the gains
from favourable stock outcomes are decreased by price paid for buying the call option. A reverse hedge
will be used when an investor short-sells the stock and is concerned about an increase in the price of
the stock. If they had not bought a call, their loss would have been the total amount of increase in price.
When they buy a call, any loss from the short stock position will be oset by the gain from the call and
the maximum loss would be the call price paid. However, in case the stock price decreases, ...
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