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?
a) She has limited loss and unlimited profit potential.
b) She has unlimited loss and limited profit potential.
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.
Somebody who has a short position in an option is the writer (writer) of an option.
The obligations incurred by a short options position correspond to the rights enjoyed by the long options position
You are right about (b). But, a short call position does not imply an obligation to buy (that would be a short put).