what is the maximum loss for an individual who purchases an option? qid: 3569871 mark for review a the strike price times 100. b the difference between the market price of the underlying security and the strike price. c 100% of the premium. d an unlimited amount.

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19-12-2022
Business

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what is the maximum loss for an individual who purchases an option? qid: 3569871 mark for review a the strike price times 100. b the difference between the market price of the underlying security and the strike price. c 100% of the premium. d an unlimited amount.

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aashvi1 aashvi1 · Answer 1 · 2022-12-25T03:18:38-05:00

Opting for option C is the best course of action because a put writer will profit most if the market price rises and the put expires "out of the money." In this case, the put writer keeps the premium amount.

What is the maximum profit a call option buyer can achieve?

As a call buyer, your potential profit is boundless because there is no limit on price rise. What choices are there for a call buyer? > to buy the underlying when exercising the option would be profitable.

Exactly how is the strike price determined?

The stock will be sold for the price determined by the seller as the strike price on the day the contract expires.

According to the given information

Opting for option C is the best course of action because a put writer will profit most if the market price rises and the put expires "out of the money." In this case, the put writer keeps the premium amount.

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