CHAPTER 9
Bearish Strategies
Bearish option strategies are used when the options investor believes the underlying stock price is going to move downwards. It is essential the investor assesses how low the stock price can fall and the time frame in which the decline will occur in order to select the best trading strategy.
The most bearish of options strategies is the simple put option buying strategy. This is a strategy that is used by most newbie investors just like you and is utilized when the stock price is expected to move quite a bit from current price.
It is unusual for a stock price to make steep movements either up or down. So when investors believe the share price will have a moderate move downwards, they use bear spreads to reduce their ...
Get Mastering Options now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
