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What position has more downside exposure: a short position in a call option or a short-position in a ...

anushaz06

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What position has more downside exposure: a short position in a call option or a short-position in a ...

What position has more downside exposure: a short position in a call option or a short-position in a put option on the same stock? In other words, if the worst outcome occurred for each option, which would lose more money?

▸ Short call

▸ Short put

▸ Both lose an equal amount of money.

▸ It depends on the premiums of the two options.

Textbook

Corporate Finance Online

Corporate Finance Online

Edition: 2^nd

Authors: Eakins, McNally

Read 72 times

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finsterchuck

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anushaz06 Author

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Thanks

yen

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I appreciate what you did here, answered it right Smiling Face with Open Mouth

Smiling Face with Open Mouth

jodie1

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You make an excellent tutor!

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