You Expect a Sizable Jump in the Stock Price but Are

question 35

Multiple Choice

You expect a sizable jump in the stock price but are not sure of the direction in which the stock will go.Which of the following alternatives would be best?

• A)Buy call options.
• B)Buy put options.
• C)Sell a straddle.
• D)Buy a call and delta hedge it.

---

Definitions:

Armistice

An agreement made by opposing sides in a conflict to stop fighting for a certain period, a truce often preceding a formal peace treaty.

Austria

A landlocked country in Central Europe, known for its cultural heritage, historical significance, and alpine landscapes.

Otto Von Bismarck

A Prussian statesman who engineered the unification of Germany in 1871 and served as its first Chancellor.

German State

Refers to the political and geographic entity located in Central Europe, known for its rich history, culture, and significant role in both world wars.