SIE practice questionmediumExercise/assignment
If an investor is assigned on a short call, what must they do?
- ABuy 100 shares at the strike price
- BDeliver (sell) 100 shares at the strike price✓ Correct answer
- CDeliver (sell) the option contract
- DDeliver (sell) cash equal to the premium
Explanation
Why B — Deliver (sell) 100 shares at the strike price
A short call assignment requires delivery (sale) of 100 shares. The obligation is not to buy, nor to deliver the contract itself.
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