You have a portfolio with long positions in both puts and calls.The volatility in the market rises.

Name: You have a portfolio with long positions in both puts and calls.The volatility in the market rises.
Brand: Quizplus
Rating: 4.8 (57 reviews)

Question

Quizplus · Accepted Answer

If the volatility in the market rises, both the puts and calls in your portfolio will increase in value. Therefore, your overall portfolio will gain value. This is because the value of options increases with higher volatility due to increased chances of the options ending up in-the-money.

You Have a Portfolio with Long Positions in Both Puts