Which of the follow options strategies are consistent in their belief about the future behavior of the underlying asset price?
A)Selling calls and selling puts
B)Buying calls and buying puts
C)Buying calls and selling puts
D)none of the options

Question

Quizplus · Accepted Answer

Buying calls and selling puts are consistent in their belief that the underlying asset price will increase. Buying calls gives the holder the right to buy the underlying asset at a set price, which is profitable when the price goes up. Selling puts gives the seller the obligation to buy the underlying asset at a set price, which is profitable when the price goes up or remains stable. The other options have conflicting views on the future behavior of the underlying asset price.

Which of the Follow Options Strategies Are Consistent in Their