If an investor buys a put option on shares he owns and then the price of the shares rises,the investor:

Question

Quizplus · Accepted Answer

If the price of the shares rises, the investor can simply choose not to exercise the option and hold onto his shares, as the put option gives him the right to sell the shares at a predetermined price, not the obligation. Therefore, he does not have to exercise the option and can avoid any potential loss from the price rise.

If an Investor Buys a Put Option on Shares He