You think the price of GM stock is going to fall. In order to make money, you could either sell a call option on GM stock, or buy a put option on GM stock.

Question

Quizplus · Accepted Answer

Selling a call option on GM stock would allow you to profit if the stock price falls, as the option would likely expire worthless and you'd keep the premium. Buying a put option gives you the right to sell the stock at a predetermined price, which could be higher than the market price if the stock falls, thus also leading to a profit.

You Think the Price of GM Stock Is Going to Fall