Credit risk in the options market is only a concern to the option seller.

Question

Quizplus · Accepted Answer

Credit risk is a concern for both the option seller and the option buyer. The option seller is exposed to credit risk because they may not receive the payment for the option premium or may incur losses if the buyer exercises the option. On the other hand, the option buyer is exposed to credit risk because they may not receive the underlying asset if the seller defaults on their delivery obligation.

Credit Risk in the Options Market Is Only a Concern