Which of the following is similar to a short position in a stock?
A) buying a call option
B) buying a put option
C) realizing a short-term capital gain
D) writing a covered call

Question

​Which of the following is similar to a short position in a stock?
A) ​buying a call option
B) ​buying a put option
C) realizing a short-term capital gain
D) ​writing a covered call

Quizplus · Accepted Answer

Buying a put option gives the holder the right, but not the obligation, to sell the underlying stock at a specified strike price. This is similar to a short position in a stock because the investor profits if the stock price decreases.

​Which of the Following Is Similar to a Short Position

Which of the Following Is Similar to a Short Position