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Option Options


May 19, 2011 | Capital Markets

Which of the following option strategies would provide an investor with the greatest gain potential in a rising market?




Quiz Results
Answer Key #1 Short Put
#2 Long Put
#3 Short Call
#4 Long Call

Correct Answer: # 4


Explanation:
Both long calls and short puts are profitable in a rising market, but long calls have unlimited gain potential.

A short put is limited to the premium received for it.



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