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SIE: Equity Securities
SIE practice questionmediumLong/short positions

A customer is long 1 ABC 40 put. What does this give the customer the right to do?

  1. ASell 100 shares of ABC at $40✓ Correct answer
  2. BBuy 100 shares of ABC at $40
  3. CSell 1 share of ABC at $40
  4. DBuy 1 share of ABC at $40
Explanation

Why ASell 100 shares of ABC at $40

Long puts give the right to sell 100 shares at the strike price. Buying is associated with calls, and each contract is for 100 shares.

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