SIE practice questioneasyStraddles
An investor believes a stock will be highly volatile but is unsure of the direction. Which two-option strategy is most appropriate?
- ALong straddle✓ Correct answer
- BCovered call
- CShort put
- DBull call spread
Explanation
Why A — Long straddle
A long straddle involves buying a call and a put to profit from volatility regardless of direction. The other choices do not profit from both up and down movements.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Related Options questions