Asked by Ashley Lowell on Apr 25, 2024
If you anticipate a dramatic decline in stock prices, which naked strategy will make you the most profit?
A) long call
B) long put
C) short call
D) short put
Dramatic Decline
A rapid and significant drop in the value or price of an asset or market.
Naked Strategy
A trading tactic involving the speculative purchase or sale of financial instruments without protective measures to offset potential losses.
Long Put
An options strategy where an investor purchases a put option, betting that the underlying asset's price will decline below the strike price before expiration.
- Ascertain tactics for capitalizing on or protecting against particular market fluctuations.
- Examine the consequences of option pricing and the potential for profit in specific strategies.
Learning Objectives
- Ascertain tactics for capitalizing on or protecting against particular market fluctuations.
- Examine the consequences of option pricing and the potential for profit in specific strategies.