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SIE: Options
SIE practice questionmediumMax gain/loss calculations

The maximum loss for a short uncovered call writer is:

  1. AStrike price plus premium
  2. BStrike price minus premium
  3. CPremium received
  4. DUnlimited✓ Correct answer
Explanation

Why DUnlimited

Uncovered calls have theoretically unlimited risk if the stock price soars. The other choices limit risk incorrectly.

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