The buyer of a long call option:
A) has a maximum loss equal to the premium paid.
B) has a gain equal to but opposite in sign to the writer of the option.
C) has an unlimited maximum gain potential.
D) all of the above

Question

Quizplus · Accepted Answer

The buyer of a long call option indeed has a maximum loss limited to the premium paid for the option (A), stands to gain or lose in a manner that is opposite to the writer of the call option (B), and has an unlimited maximum gain potential as the price of the underlying asset can theoretically rise indefinitely (C). Therefore, all of the given statements are correct.

The Buyer of a Long Call Option