Stock market assumptions

When you think that the stock market will go up or down we make certain assumptions.

Stock market assumptions

If we assume correctly, we make money

Assumption that the stock market will go up

• We buy stocks – we profit by stock appreciation
• We buy call options
• We sell put options

Assumptions that the stock market will go down

• We short sell stocks – We borrow 100 shares, when price decline we buy new shares, profit on the difference
• We sell call options
• We buy put options