Under what circumstance will the buyer of a put option be asked to fulfill her obligation?
A) When the stock price has declined below the strike price
B) When the stock price has increased above the strike price
C) The put buyer has an equal obligation regardless of the relationship between stock and strike prices.
D)The put buyer has no obligation whatsoever.

Question

Quizplus · Accepted Answer

The buyer of a put option has the right, but not the obligation, to sell the underlying asset at the strike price before the option expires. The buyer can choose whether or not to exercise this right, thus they have no obligation to fulfill.

Under What Circumstance Will the Buyer of a Put Option