Chapter 02 · Section 2.1

Potential Profits and Losses

Which of the following positions imply an unlimited or practically unlimited profit potential and limited risk of loss?

a) Long call
b) Long put
c) Short call
d) Short put
• e) a and b
  Yes. If you have a long position in calls or puts your risk of loss is limited to the premium you paid for the option and your profit potential is unlimited (or limited to the exercise price for a long put position). Continue
  f) a and c

(Click here for help)