Speculators who anticipate a sharp increase in stock market prices overall may consider purchasing put options on one of the market indexes.

Question

Speculators who anticipate a sharp increase in stock market prices overall may consider purchasing put options on one of the market indexes. ​

Quizplus · Accepted Answer

Speculators expecting a sharp increase in stock market prices would more likely consider purchasing call options, not put options, on market indexes to profit from the anticipated rise. Put options are typically bought if a decline in the market or a specific stock is anticipated.

Speculators Who Anticipate a Sharp Increase in Stock Market Prices