SIE practice questionmediumBull spread
An investor buys a call with a $40 strike and sells a call with a $45 strike. This is a:
- ABear call spread
- BBull call spread✓ Correct answer
- CStraddle
- DProtective call
Explanation
Why B — Bull call spread
Buying a lower strike call and selling a higher strike call is a bull call spread, designed for moderate bullishness. The other options describe different or incorrect strategies.
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
- If an option spread requires a net payment when established, it is classified as a:
- A customer buys 1 ABC May 50 call and 1 ABC May 50 put. This position is called a:
- The maximum loss for an investor who buys a call option is:
- If an investor owns 100 shares of XYZ and buys 1 XYZ put option, this strategy is known as: