If a put and call cost the same, how can an investor offset the cost of a buying a call?
A) Borrowing money
B) Sell a put
C) Sell a stock
D) Wait for the stock price to rise

Question

Quizplus · Accepted Answer

Selling a put can generate income to offset the cost of buying a call. This is known as a "bullish put spread" strategy, where the investor simultaneously buys a call option and sells a put option with the same expiration date and strike price. By selling the put, the investor receives a premium which can partially or fully offset the cost of buying the call. If the stock price rises, the call option will become more valuable and the put option will expire worthless, generating a profit for the investor. However, if the stock price falls, the investor may be assigned the shares at the strike price of the put option, potentially resulting in a loss.

If a Put and Call Cost the Same, How Can