SIE practice questionmediumMax gain/loss calculations
The maximum gain for a seller of a put option is:
- AThe current stock price
- BUnlimited
- CThe strike price minus the premium
- DThe premium received✓ Correct answer
Explanation
Why D — The premium received
Put sellers’ maximum gain is the premium received if the option expires. The other choices misunderstand risk/reward—there is no unlimited upside, and the strike is not profit.
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