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An options trader is assessing the aggregate risk of her currency options exposures. As an options buyer, she can potentially ___ lose more than the premium originally paid. As an option seller, however, she has a ___ risk on the contract and always receives a premium.
Suggested Answer: A
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17 comments · newest first
LE
Leonardo
23 days ago
True, but the wording is key. "Sometimes" could confuse things.
YO
Yong
28 days ago
I lean towards C too. Limited risk is crucial for sellers.
AR
Art
1 month ago
But isn't the risk always unlimited for sellers? That's why A is right.
KA
Kaycee
1 month ago
I feel like D could be a trick. Limited risk sounds safe.
DA
Dalene
1 month ago
C makes sense. Sellers always get a premium, right?
TH
Theola
2 months ago
No way, it's definitely C. Sellers have limited risk.
EV
Eve
2 months ago
I agree, but what about B? Sometimes you could lose more.
PE
Pete
2 months ago
I think it's A. Options buyers never lose more than the premium.
TI
Titus
2 months ago
Definitely A) Never, unlimited for buyers!
DE
Delpha
2 months ago
I think it's C) Never, limited for buyers.
RE
Rene
2 months ago
Wait, how can buyers lose more than the premium?
TA
Tamekia
3 months ago
Totally agree, sellers have unlimited risk!
CA
Casie
3 months ago
A) Never, unlimited is correct for buyers.
BE
Bethanie
3 months ago
I feel like the seller's risk is definitely unlimited, but I can't remember if the buyer's risk is sometimes or never. This is tricky!
WI
Wilda
3 months ago
I practiced a similar question, and I think the buyer's loss is limited to the premium. So, C could be the answer.
YO
Yong
3 months ago
I'm not entirely sure, but I remember something about sellers having unlimited risk. So maybe it's A or B?
VE
Verona
4 months ago
I think as an options buyer, you can never lose more than the premium paid, right? That sounds familiar from my notes.