Series 7 - General Securities Representative Exam

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Your client is extremely bullish on a technology stock. He has an aggressive growth investment objective and 30 years to retirement. He wants to profit from a large move in the underlying stock over the next year. Which of the following might you suggest?

Buy put options on the stock
A
Buy at the money calls that expire in a month
B
Buy LEAP calls
C
Buy 100 shares of the stock and sell a covered call
D

Explanations

Buying LEAP calls makes sense here given the investor's age and investment objective. LEAP calls will give him 1 - 2 years until expiration, so the time decay of the options won't hurt him at this time.

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