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SIE: Options
SIE practice questioneasyOptions expiration

Which of the following occurs if a listed equity option expires unexercised?

  1. AThe seller must deliver the shares
  2. BThe buyer receives the premium from the seller
  3. CThe seller pays the strike price
  4. DThe buyer loses the premium paid✓ Correct answer
Explanation

Why DThe 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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