DOCUMENT 15 OF 26 - Babson College
on the puts. If the stock is at 50 when the put expires, the puts are. worthless but the bank has been making money selling the stock at higher and. higher prices. If the stock declines, the bank buys more stock to hedge the position. But. if the put is below 40 when the put expires, the investment bank will ``put'' the stock back to the ... ................
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