Steve recently sold an option that requires him to purchase 100 shares of Omega stock at $40 a share should the option owner decide to exercise the option.What type of option contract did Steve sell?
A)futures option
B)call option
C)put option
D)straddle
E)strangle

Question

Quizplus · Accepted Answer

Steve sold a put option, which obligates him to buy the underlying stock at the strike price if the option is exercised by the owner.

Steve Recently Sold an Option That Requires Him to Purchase