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    Question

    An investor who sells a call option is said to have

    a:
    A Long call position and bears an obligation to sell. Correct Answer Incorrect Answer
    B Short call position and bears an obligation to sell. Correct Answer Incorrect Answer
    C Long call position and has the right to buy. Correct Answer Incorrect Answer
    D Short call position and has the right to sell. Correct Answer Incorrect Answer
    E Short put position and has the right to sell. Correct Answer Incorrect Answer

    Solution

    The seller/writer of an option has an obligation if the buyer exercises the option. A short call position means the writer has sold a call option. If the buyer exercises the right to buy the underlying asset, the writer is obligated to sell it at the strike price.

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