Question

Which of the following is the riskiest single-option position?

(a) long the call.

(b) long the put.

(c) short the call.

(d) short the put.

(v) An investor will make a net profit from a call option when the price of the stock is:

(a) above the strike price.

(b) below the strike price plus the premium.

(c) above the strike price plus the premium.

(d) at the strike.

Answer #1

**1.Explanation**

Riskiest single-option position is short the call .The biggest risk in short the call is it is the potential for infinite loss,if the stock price goes to 0 then it is 100% loss

**So option c is correct.**

2.Call option -Grants the right to buy the underlying asset by a particular date for a strike price.

An investor makes a net profit from a call option when the price of the stock is above the strke price plus the premium.

**So option c is correct.**

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