Chapter 02 · Section 2.1

Price Fall- Call

FUTURES & FORWARDS CALL OPTIONS PUT OPTIONS

If you expect a fall in price SHORT ...... ...... (Bearish)

If you expect a rise in price LONG ...... ...... (Bullish)

With a call option, if you expect the price of the underlying asset to fall, you:

a) take a short position.
Yes. If you are short a call and the market price of the underlying asset falls below the exercise price, you will not be called upon to fulfill your obligation and you will profit from the premium you received for the option. Continue
b) take a long position.