You have taken a stock option position and,if the stock's price drops,you will get a level gain no matter how far prices fall,but you could go bankrupt if the stock's price rises. You have________.

Question

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Writing a call option means you are selling the right to buy the stock at a certain price. If the stock's price rises significantly, the buyer of the call option will exercise their right to buy the stock at the strike price, potentially causing the seller (the person who wrote the call option) significant losses, which could lead to bankruptcy. If the stock's price drops, the call option becomes worthless to the buyer, leading to a level gain for the seller (the premium received from selling the option).

You Have Taken a Stock Option Position And,if the Stock's