1.

What Are The Rights And Obligations Of The Buyer And Seller For The Call And Put Options?

Answer»

Rights and Obligations of the Buyer for CALL Option:

  • Pays premium
  • RIGHT to exercise and buy the shares
  • Profits from rising PRICES
  • LIMITED losses, unlimited gain

Rights and Obligations of the SELLER for Call Option:

  • Receives premium
  • Obligation to sell shares if exercised
  • Profits from falling prices or remaining neutral
  • Unlimited losses, limited gain

Rights and Obligations of the Buyer for Put option:

  • Pays premium Right to exercise and sell shares
  • Profits from falling prices
  • Limited losses, unlimited gain

Rights and Obligations of the Seller for Put option:

  • Receives premium
  • Obligation to buy shares if exercised
  • Profits from rising price or remaining neutral
  • Potentially unlimited losses, limited gain

Rights and Obligations of the Buyer for Call Option:

Rights and Obligations of the Seller for Call Option:

Rights and Obligations of the Buyer for Put option:

Rights and Obligations of the Seller for Put option:



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