The Buyer (Long) of a Put Option

question 54

Multiple Choice

The buyer (long) of a put option:

• A) has a maximum loss equal to the premium paid.
• B) has a gain equal to but opposite in sign to the writer of the option.
• C) has maximum gain potential limited to the difference between the strike price and the premium paid.
• D) all of the above

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Definitions:

Lives

The existence of individuals or organisms characterized by growth, reproduction, and the capacity for change and adaptation in their environment.

Selling

The act of exchanging a product or service for money or other compensation.

Two-Way

Communication or interaction that involves reciprocal action or influence, often referring to communication channels that allow for feedback from the recipient.

Communication

The process through which information is exchanged between individuals through a common system of symbols, signs, or behavior.