Which of the following is true regarding options?
A) Options are only traded over-the-counter.
B) Speculators sell at-the-money put options when they expect that the currency's value will rise.
C) Speculators purchase at-the-money call options when they expect that the currency's value will fall.
D) Speculators sell at-the-money currency call options when they expect that the currency's value will rise.

Question

Quizplus · Accepted Answer

Option A is false as options can be traded both over-the-counter and on organized exchanges. Option C is false as speculators purchase at-the-money call options when they expect that the currency's value will rise, not fall as stated. Option D is also false as speculators sell at-the-money currency call options when they expect the currency's value to fall, not rise as stated. Therefore, the correct answer is B, which states that speculators sell at-the-money put options when they expect the currency's value to rise.

Which of the Following Is True Regarding Options