Bearish and Bullish Strategies
Chapters in this video
- 0:00 Why selling a call versus a put depends on outlook
- 1:02 Ivy is bullish, Sam is bearish
- 1:50 Long stock versus short sale and unlimited loss
- 3:02 Three bullish strategies including writing a put
- 4:28 Three bearish strategies and the naked call danger
- 5:38 Matching strategy to conservative, moderate, aggressive
- 6:23 Rapid-fire exam recap
What this video covers
- Why bullish strategies include buying stock, buying calls, and selling puts; and why selling a put is bullish despite involving an option sale
- Why bearish strategies include short selling, buying puts, and selling calls; and how to match each to a falling price expectation
- How short selling works mechanically and why its maximum loss is unlimited because a stock price can rise without bound
- Why a naked call carries unlimited loss potential, and how it mirrors the risk profile of a short sale
- How maximum gain and maximum loss flip between option buyers and option writers, with buyers limited to premium paid and writers exposed to greater or unlimited risk
- How to match conservative, moderate, and aggressive clients to the appropriate bullish or bearish strategy based on risk tolerance
Read the full lesson, free
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