To hedge the currency risk of the WP stock position, they should buy puts in the amount of WP 10,000,000 × -1/-0.3 = WP 33,333,333.33. The put gives them the right to sell WP. With WP 31,250 in one contract, they should buy WP 33,333,333.33/31,250 = 1,067 WP put option contracts |
