SIE practice questionmediumOptions - Put Option
What right does the holder of a put option have?
- ATo buy the underlying security at the strike price
- BTo sell the underlying security at the strike price✓ Correct answer
- CTo receive dividends from the underlying company
- DTo demand early repayment of a bond
Explanation
Why B — To sell the underlying security at the strike price
A put grants the right to sell at the strike, not buy, receive dividends, or call bonds.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Options questions
- An investor writes (sells) a put option, and the stock falls below the strike price. The investor must:
- An investor buys a put option and simultaneously sells a call option on the same stock and strike price. What type of…
- Before a customer first trades options, the firm must:
- For an at-the-money call option, what is the intrinsic value and time value, assuming the premium is $3?
- Writing a covered call involves:
- If a stock is trading at $55 and a call option has a $50 strike price, what is the call’s intrinsic value?
- An investor holds a call option with a strike price of $50 when the underlying stock is trading at $60. What is the…
- Buying a call option gives the investor the right to: