Option traders incur which of the following types of costs?
A) margin requirements
B) taxes
C) stock trading commissions
D) a and b
E) a, b and c

Question

Quizplus · Accepted Answer

Option traders incur margin requirements as they need to deposit a certain amount of money with their brokerage firm to cover the potential losses. They also need to pay taxes on their gains. In addition, they may also incur stock trading commissions when buying or selling options. Therefore, option traders incur all three types of costs mentioned in the options, making choice E the correct answer.

Option Traders Incur Which of the Following Types of Costs