The seller of a put option has:
A) Substantial opportunity for gain and limited risk of loss
B) Substantial risk of loss and substantial opportunity for gain
C) Limited risk of loss and limited opportunity for gain
D) Substantial risk of loss and limited opportunity for gain

Question

Quizplus · Accepted Answer

The seller of a put option has a substantial risk of loss because if the underlying asset's price falls significantly, they may have to buy it at a higher price. However, their opportunity for gain is limited to the premium received from selling the option.

The Seller of a Put Option Has