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SIE: Options
SIE practice questionmediumOptions expiration

If an option expires worthless, the seller’s result is:

  1. AGain of the premium received✓ Correct answer
  2. BObligated to buy shares at the strike
  3. CReturn of the premium to the buyer
  4. DBoth buyer and seller break even
Explanation

Why AGain of the premium received

The seller keeps the premium if the contract expires unexercised. No obligation is incurred.

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