Call Options
An investor who expects the market to rise significantly would MOST likely:
Call buyers are bullish. Put buyers are bearish. Think: "Call Up, Put Down."
Complete Analysis & Legal Rationale
Buying call options is a bullish strategy. As the underlying stock price rises, the value of call options increases, allowing the holder to profit from the upward movement with limited risk (maximum loss is the premium paid).
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Buying puts is bearish - profits when prices fall.
Selling calls is bearish/neutral - seller wants prices to stay flat or fall.
Matches the verified teaching point in the explanation.
Short selling profits when prices fall - this is a bearish strategy.
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA materials.