Series 7 practice questionmediumOptions — Same Side of Market
Which two options positions are on the same side of the market (bearish)?
- ALong call and short put
- BLong put and short call✓ Correct answer
- CLong call and long put
- DShort call and short put
Explanation
Why B — Long put and short call
Long puts and short calls are both bearish positions — they profit when the stock declines. Long calls and short puts are both bullish (same side of the market on the upside). Understanding which positions are on the same side is essential for position limit calculations and market outlook analysis.
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