Question

A writer of a call option will want the value of the underlying asset to __________ and a buyer of a put option will want the value of the underlying asset to _________. decrease, decrease decrease, increase increase, decrease increase, increase

Answer 1

Answer:

Decrease, decrease          

Explanation:

A writer of a call option will want the value of the underlying asset to decrease and a buyer of a put option will want the value of the underlying asset to decrease. The writer of the call option who is also the seller of the put option will want the value of the underlying asset which is the financial assets upon which a derivative's price is based to decrease so as to make more profit while the buyer also wants it to decrease so he/she can pay less for the asset.