Why Is the Holder of an Option Not Required to Post

question 68

Multiple Choice

Why is the holder of an option not required to post margin under the Option Clearing Corporation rules?

• A) Once an option is purchased, no further money is at risk.
• B) The seller pays all costs.
• C) The credit worthiness of the holder covers all potential losses.
• D) The holder must post securities instead of margin.

---

Definitions:

Correlation

A statistical measure that indicates the extent to which two or more variables fluctuate together.

Humanistic Psychology

A school of thought that investigates how people grow to become happier and more fulfilled; it focuses on the basic goodness of people.

Behaviorism

A branch of psychology that focuses on observable behaviors rather than on internal events like thinking and emotion, emphasizing the effects of environment on behavior.

Gestalt Psychology

A theory of mind and brain positing that the operational principle of the brain is holistic, parallel, and analog, with self-organizing tendencies.