Answer: Bull spread with puts

If the stock price **increases dramatically**, the most profitable strategy among the choices is the one that benefits from a strong rise in the underlying. A **bull spread with puts** is a bullish strategy using puts, typically constructed as: - short higher-strike put - long lower-strike put When the stock rises substantially, both puts expire worthless, so the trader keeps the **net credit** received initially. The other strategies are not favored by a large upward move: - **Bear spread with puts** benefits from falling prices. - **Butterfly spread with calls** profits most when the stock ends near the middle strike. - **Calendar spread with calls** is typically best when the stock is near the strike at the short option’s expiry. Therefore, the most profitable strategy is **A. Bull spread with puts**.

Author: Manit Arora