Buyers of put options anticipate the value of the underlying asset will __________, and sellers of call options anticipate the value of the underlying asset will ________.
A)increase; increase
B)decrease; increase
C)increase; decrease
D)decrease; decrease

Question

Quizplus · Accepted Answer

Buyers of put options anticipate a decrease in the value of the underlying asset to profit by selling it at the strike price, which would be higher than the market price. Sellers of call options anticipate a decrease in the value of the underlying asset, believing it will not exceed the strike price, allowing them to keep the premium without having to sell the asset at a higher price.

Buyers of Put Options Anticipate the Value of the Underlying