Chapter 02 · Section 2.1
Short Gold
Lara has a short position in 10 December 350 CMX gold futures calls.
Which of the following statements are true?
b) She has unlimited loss and limited profit potential.
Yes. Lara's profit is limited to the premium she received for writing 10 calls. She also has unlimited upside risk if the market goes against her position, i.e. if the market rises.Continue
c) She has the right to buy at 350 but no obligations.
d) She has the obligation to buy at 350 if she is assigned.
a) She has limited loss and unlimited profit potential.
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