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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Multinational Business Finance

ISBN: 978-0132743464

13th edition

Authors: David K. Eiteman, Arthur I. Stonehill, Michael H. Moffett

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Question Posted: Oct 13, 2015 06:21 AM

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Why would anyone write an option, knowing that the gain from receiving the option premium is fixed,

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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

Multinational Business Finance

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