What is the potential loss for a put option seller? Option: Dependent on the implied volatility of the underlying asset, Limited to the premium received, Unlimited, Limited to the difference between the strike price and the spot price

<< Back

Hi

Show Ans

i

What is the potential loss for a put option seller?

Dependent on the implied volatility of the underlying asset

Limited to the premium received

Unlimited

Limited to the difference between the strike price and the spot price

<< Back

Hi

Show Ans

i

What is the maximum potential loss for a put option buyer?

The spot price

The premium paid

The strike price

Unlimited

<< Back

Hi

Show Ans

i

What is the maximum potential loss for a call option buyer?

Unlimited

The premium paid

The spot price

The strike price

<< Back

Hi

Show Ans

i

What is the profit potential for a call option buyer?

Limited to the premium paid

Dependent on the spot price at expiry

Limited to the strike price

Unlimited

<< Back

Hi

Show Ans

i

What is the profit potential of a Put Ratio Back Spread when the market goes down?

Limited

Unlimited

Fixed

Depends on the strike price

<< Back

Hi

Show Ans

i

What is the formula for calculating the profit or loss (P&L) from selling a put option?

P&L = Premium Received - Max [0, (Strike Price - Spot Price)]

P&L = Max [0, (Spot Price - Strike Price)] - Premium Received

P&L = Max [0, (Strike Price - Spot Price)] - Premium Received

P&L = Premium Received + Max [0, (Strike Price - Spot Price)]