There Are Four Basic Option Positions

question 61

Multiple Choice

There are four basic option positions. Which of the below is ONE of these four positions?

• A) Buying a call option (short a call option)
• B) Selling a call option (long a call option)
• C) Buying a put option (short a put option)
• D) Selling a put option (short a put option)

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Definitions:

Competitive Price-searcher

A market participant who actively compares prices among competitors to find the best possible deal, often in markets with imperfect competition.

Short-run Losses

Financial losses that a firm experiences within a limited time period, usually due to fixed costs and market conditions.

Industry Entry

The process or act of starting a new venture or entering a market as a new competitor.

Competitive Price-searcher

A market participant who actively compares prices among different suppliers to find the best deal.