When the investor is bullish about the stock’s performance and expect stock’s price to go up, he buys (long) a ___________ option.
When the investor is bearish about the stock’s performance, and expect stock’s price to go down, he buys (long) a ____________ option.
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If you cannot answer this question, do go back to my first blog post where I share more on buying call and put options.
http://helmihakim.com/investment/m9a-insurance-regulatory-exam-blog-post-no-1/
It is important that you understand the very basic first, because with very strong fundamentals, you can easily grasp the advanced ones later. Moreover, MCQ exams like M9A test more on your understanding, rather than just pure memory work. If you can answer the above correctly, do continue reading this blog post.
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There are another group of people who wants to make money. They are the option sellers. They make money ...
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