In Regards to the Writing (Selling) of Put Options, Which

question 42

Multiple Choice

In regards to the writing (selling) of put options, which of the below statements is TRUE?

• A) The profit and loss profile for a short put option is the mirror image of the long put option.
• B) The theoretical maximum loss can be substantial should the price of the underlying asset fall; at the outside, if the price were to fall all the way to zero, the loss would be as large as the strike price less the option price.
• C) The profit and loss profile for a short put option is the mirror image of the long put option with the maximum profit from this position being the option price
• D) All of these

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