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CFA Level 3
Derivatives & Currency Mgmt

Identifying a Bullish Option Strategy

Medium Derivative Strategies Option Strategies

A portfolio manager is assessing various option strategies to take advantage of a strong bullish outlook on a stock that is currently trading at $50. The manager is considering three strategies:

1. Buying a call option with a strike price of $55 that expires in three months.

2. Selling a put option with a strike price of $45 that expires in three months.

3. Implementing a bull spread by buying a call option with a strike price of $50 and selling a call option with a strike price of $60, both expiring in three months.

Which of the following options is best described as a bullish option strategy?

Hint

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% Correct49%