Traders Who Believe Volatilities Will Fall Significantly in the Near-Term

question 33

Multiple Choice

Traders who believe volatilities will fall significantly in the near-term will:

• A) sell futures now.
• B) buy options now.
• C) sell options now.
• D) buy futures now.

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Definitions:

Payoffs

The outcome or benefit received from a decision or action, often used in the context of games or economic transactions.

Decision Alternative

An available option or course of action that can be taken in a decision-making process.

Expected Monetary Value

A calculation used in decision-making to determine the average outcome when the future includes scenarios that may or may not happen.

EOL Decision

A decision made regarding the end-of-life status of a product, system, or component, often concerning its discontinuation or phased out support.