Series 7 - General Securities Representative Exam

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Which of the following is a neutral options strategy?

Long Call Spread
A
Long Straddle
B
Short Strangle
C
Long Puts
D

Explanations

A long call spread is bullish. A long straddle is a trade where the investor wants the price to move drastically in one direction or another (pro volatility). Long puts are a bearish trade. The short strangle is selling a call above the market and a put below the market with hopes that the market trades in a range and both expire worthless- and the investor pockets the premium. C. Short Strangle