The option buyer who expects a stock price to decline will purchase

Name: The option buyer who expects a stock price to decline will purchase
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Question

Quizplus · Accepted Answer

The option buyer who expects a stock price to decline will purchase a put option. This gives them the right to sell the stock at a predetermined price, called the strike price, which is higher than the price at which they expect the stock to be trading. By doing this, they can profit from the decline in stock price.

The Option Buyer Who Expects a Stock Price to Decline