SIE practice questionhardOptions - Naked Calls
Which options strategy involves the highest theoretical risk?
- ABuying a put
- BBuying a call
- CSelling a naked call✓ Correct answer
- DSelling a covered call
Explanation
Why C — Selling a naked call
Selling naked (uncovered) calls has unlimited risk if the price rises. Buying calls/puts limits loss to premium; covered calls are hedged by stock ownership.
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