Question

Which of the following positions are bullish on the market? [Hint: Bullish means that investor believes that a stock or the overall market will go higher.

I. buying a stock

II. writing a put

III. buying a call

IV. selling a call

		b. I and IV only
		d. I, II, and III only
		e. I, II, and IV only
		c. II and III only
		a. I and II only

Answer 1

Option D is correct. I, II, and III only

I. Buying a Stock. You buy a stock when you expect the stock to increase in value then you can make profits.

II Writing a Put. You write or sell the put when you expect the stock Price to rise. So that put buyer will not exercise the option and writer can profits of Premium.

III. Buying a Call. You buy the call option when you expect the share price to increase, the value of call option will increase as the Stock Price rise.

In all the above the cases, the investors are bullish as they expect the price to rise so that they can make profits.

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