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.
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 owns 100 shares of XYZ and buys a put. Which strategy is this?
- What is the maximum loss for a buyer of a call option?
- What is the breakeven point for a long call?
- If a put option is exercised, what must the seller of the put do?
- Time value in an option premium refers to:
- An investor who believes a stock's price will fall would most likely:
- A put option with a $30 strike price is trading on a stock currently worth $27. What is the intrinsic value of the put?
- A covered call is created when an investor: