Series 7 Exam Question 79: Answer and Explanation

Question: 79

Which TWO of the following are bullish options strategies?

I. Buying calls

II. Buying puts

III. Writing calls

IV. Writing puts

• A. I and III
• B. I and IV
• C. II and III
• D. II and IV

Correct Answer: B

Explanation:

B. If you're bullish on a security, you want the market price to increase. If you're bearish, you want the price to decrease. Buyers of calls and writers of puts want the price of the underlying security to increase. Buyers of puts and writers of calls want the price of the underlying security to decrease.