SIE practice questionmediumLong/short positions
A customer is long 1 ABC 40 put. What does this give the customer the right to do?
- ASell 100 shares of ABC at $40✓ Correct answer
- BBuy 100 shares of ABC at $40
- CSell 1 share of ABC at $40
- DBuy 1 share of ABC at $40
Explanation
Why A — Sell 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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