Buying a put option gives the investor the right to sell a stock at a specific strike price, effectively setting a floor for potential losses if the stock price declines. This is a common risk-management strategy.
* A is correctbecause buying puts limits downside risk while retaining the potential for upside gains.
* Bis incorrect as buying puts is a bearish strategy, not one used during upward momentum.
* Cis incorrect because selling call options does not hedge losses; it is a speculative or income-generating strategy.
* Dis incorrect because buying calls is a bullish strategy, used during upward momentum, not downward.