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CFA Level 3
Derivatives & Currency Mgmt

Call Option Strategy for Bullish Outlook

Very Easy Derivative Strategies Option Strategies

Maria is an investor who believes that the stock of Company X, currently trading at $50, will increase in value over the next three months. She is considering using options to take advantage of this expected price movement. Specifically, she is looking at a call option with a strike price of $55, expiring in three months, which is currently priced at $2. Describe a call option strategy that Maria could employ to benefit from her outlook on Company X's stock. Include key points such as the potential risks and rewards of this strategy.

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