Options strategies which are consistent with their belief about the future behavior of the underlying asset price are :
Selling calls and buying puts
Buying calls and selling puts
It is an investment term that refers to the real financial asset or security that a financial derivative is based on. Underlying assets include stocks, bonds, commodities, interest rates, market indexes, and currencies.
Why selling calls and buying puts is an implication about the future behavior of the underlying asset price?
It is because these 2 options will become a reflective of bearish position making and individual expect share price will go down.
Why buying calls and selling puts is an implication about the future behavior of the underlying asset price?
It is because these 2 options will be resulting into expectation of an investor about upward movement of stock prices.
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