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Investors Who Buy Calls or Puts Have a Cap on Their

question 79

Essay

Investors who buy calls or puts have a cap on their possible losses from holding options. Specifically, they cannot lose more than the value of their premium. How does this differ for investors who sell options?


Definitions:

Bilirubin

A yellow breakdown product of normal heme catabolism. Its levels are elevated in certain diseases, and it is responsible for the yellow color of bruises and the brown color of feces.

Ammonia

A colorless gas with a distinct sharp smell, commonly used in cleaning products and as a fertilizer, and also produced naturally in the human body.

Bacteria

Microscopic, single-celled organisms found everywhere in the environment, which can be either beneficial or harmful to humans and other living beings.

Occult Blood

Blood not visible to the naked eye, often detected in stool or urine samples to diagnose conditions such as gastrointestinal bleeding.

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