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Which of the following option positions will benefit a trader if the price of the underlying shares increases? a) Long position in a call. b)
Which of the following option positions will benefit a trader if the price of the underlying shares increases?
a) Long position in a call.
b) Short position in a call.
c) Long position in a put
d) Short position in a put.
I know the option a will definitely benefit a trade, since the St is greater than the exercise price.
however, for the option d, when the share price is higher, the put seller will from a negative profit situation to a profit situation which earns P(premium) when the share price increase.
So does the answer for this question are 2?
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