Call Options
An investor who is bearish on a stock they own would MOST likely:
Bearish strategies: buy puts, sell calls, sell stock short.
Complete Analysis & Legal Rationale
Writing covered calls is appropriate for a mildly bearish or neutral outlook. The investor earns premium income while expecting the stock price to stay flat or decline slightly. If the stock falls, they keep the premium and offset some losses.
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 more shares is a bullish strategy, not bearish.
Buying calls is bullish - profits when prices rise.
Matches the verified teaching point in the explanation.
Options on a different stock would not address the bearish view on the owned stock.
Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA materials.