The risk of early exercise is of no concern to the holder of a long straddle.

Name: The risk of early exercise is of no concern to the holder of a long straddle.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The holder of a long straddle has the right to exercise either the call option or the put option at any time before expiration. Therefore, early exercise does not pose any risk to the holder. In fact, early exercise may be advantageous in certain situations.

The Risk of Early Exercise Is of No Concern to the Holder