Call buying is the simplest form of investment in option market, therefore is the most frequently...

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Call buying is the simplest form of investment in option market, therefore is the most frequently used option "strategy" by the public investors. The success of a call buying depends primarily on one's ability to select stocks that will go up by time of option expiration. Question A1 (Motivation for Call Buying). Provide and elaborate at least two dif- ferent scenarios in which call buying is appropriate. (Words limit: 400; 15 Marks) Call buying is the simplest form of investment in option market, therefore is the most frequently used option "strategy" by the public investors. The success of a call buying depends primarily on one's ability to select stocks that will go up by time of option expiration. Question A1 (Motivation for Call Buying). Provide and elaborate at least two dif- ferent scenarios in which call buying is appropriate. (Words limit: 400; 15 Marks)

Answer rating: 100% (QA)

Scenario 1 Anticipated Stock Price Increase Call buying is often suitable when an investor expects a ... View the full answer