If you believe that stock prices are going to fall for sure, then given a fixed amount of capital, you should

Question

Quizplus · Accepted Answer

Buying put options allows an investor to profit from a decline in the underlying stock without having to sell the stock directly. This strategy limits potential losses to the cost of the put option while offering unlimited profit potential as the stock continues to decline. Selling stock or selling call options may also be viable strategies, but they involve greater risks and potentially unlimited losses. Therefore, the best choice in this scenario is to buy put options.

If You Believe That Stock Prices Are Going to Fall