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What is the best possible strategy in such circumstances

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Reference no: EM132921285

Problem 1: Assume you expect to buy the underlying in 3 months' time and want to hedge against increasing prices of the underlying. However, you don't expect the prices to increase significantly, and prefer the ability to take advantage of the favourable direction due to possible significant price declines as a result of COVID-19. What is the best possible strategy in such circumstances?

Group of answer choices

Option 1: A covered call

Option 2: A call bull spread

Option 3: A put bear spread

Option 4: A long call, short put

Reference no: EM132921285

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