An individual who speculates by selling a call option wants to bet that:
A)The market price of the underlying asset will rise.
B)The option expires worthless.
C)The price of the underlying asset will not rise.
D)The price of the underlying asset will not fall.

Question

Quizplus · Accepted Answer

Selling a call option means that the individual is obligated to sell the underlying asset at the strike price if the option is exercised by the buyer. Therefore, the seller of a call option is betting that the price of the underlying asset will not rise above the strike price, allowing them to keep the premium received for selling the option.

An Individual Who Speculates by Selling a Call Option Wants