SIE practice questioneasyOptions expiration
Which of the following occurs if a listed equity option expires unexercised?
- AThe seller must deliver the shares
- BThe buyer receives the premium from the seller
- CThe seller pays the strike price
- DThe buyer loses the premium paid✓ Correct answer
Explanation
Why D — The buyer loses the premium paid
If unexercised, the buyer forfeits the premium to the seller. The other responses are incorrect—no exchange or delivery occurs if the contract expires.
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