Buy call option with low strike price

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Reference no: EM131068683

Suppose you are certain that the XYZ stock price will decrease in the near future. Which action should you take?

1. Buy a call option with a low strike price and write a call with a high strike price.

2. Buy a put option with a high strike price and write a put with a low strike price.

3. Buy one low strike price call + Buy one high strike price call + Short two middle strike call.

4. Buy a call and a put with the same strike price.

Reference no: EM131068683

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