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Ask the Tutor ACCA AFM

Puts/calls

LLoren6y ago
Hi, I am struggling with how to know whether you should buy or sell call or put options given the details in the questions. Is there a way to work this out/remember this as I seem to get it wrong every time. Thanks!
John MoffatJohn MoffatTutor6y ago#1
We always buy options (whether put or call) except in the case of interest rate options if we are creating a collar (in which case we both buy and sell options). As to whether we buy put options or buy call options, I explain the rules (and why) in my free lectures on the management of exchange rate risk and the management of interest rate risk.
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