Series 7 - General Securities Representative Exam
Training Mode
A trader wants to make an aggressive bet on the direction of the stock. The stock has been going up and up at an astonishing rate; increasing from $316 per share to $608 per share in the last 3 months. He wants to buy call options, but after inspecting the options curve, he notices the out-of-the money calls have a huge amount of IV - Implied Volatility, making them very expensive. What can he do to potentially capitalize on the situation?
Buy the 610 call, sell the 610 put
A
Buy the 620 call sell the 700 call
B
Buy the 675 call sell the 620 call
C
Sell the at the money straddle
D