Discuss how stock options work and the difference between a put and a call. Are there any additional risks involved when trading options?
After doing research you expect profit and stock price to fall in the near future at The Purple Grape wine company because of bad weather during the grape growing season. How would you as an investor try to profit from this with options? Pick two of the four choices below and explain your reasoning.
- Buy a call
- Sell a call
- Buy a put
- Sell a put