The maximum amount that an option buyer can lose is the ________ price. The maximum profit that the option writer (seller) can realize is the ________ price.

Question

Quizplus · Accepted Answer

The maximum amount an option buyer can lose is the price paid for the option (the option price), as they are not obligated to exercise the option. The maximum profit that the option writer (seller) can realize is also the option price, as this is the income they receive for selling the option.

The Maximum Amount That an Option Buyer Can Lose Is