Why would anyone write an option, knowing that the gain from receiving the option premium is fixed,
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Why would anyone write an option, knowing that the gain from receiving the option premium is fixed, but the loss, if the underlying price goes in the wrong direction, can be extremely large?
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From the option writers point of view only two events can take place The option is not exerc...View the full answer
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Related Book For
Multinational Business Finance
ISBN: 978-0132743464
13th edition
Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett
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