If the investor anticipates that the price of stock will be stable, he or she may
A)sell a straddle
B)buy a straddle
C)buy a call
D)buy a put

Question

Quizplus · Accepted Answer

Selling a straddle involves selling both a call and a put option on the same stock with the same strike price and expiration date. This strategy is profitable when the stock price remains stable, as the investor can keep the premium from selling the options without having to sell or buy the underlying stock.

If the Investor Anticipates That the Price of Stock Will