Which of the following statements is true regarding a put writer?
A) The put writer expects the stock to remain the same or move upward.
B) The put writer expects the stock to remain the same or move down.
C) The put writer expects the stock to split.
D) The put writer expects to sell the stock prior to expiration of the option.

Question

Quizplus · Accepted Answer

The put writer (seller) generally expects the stock price to remain the same or increase. If this happens, the put option will either expire worthless or decrease in value, allowing the writer to profit by keeping the premium received for selling the put.

Which of the Following Statements Is True Regarding a Put