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
f) a and c
Long call: a long position in a call; being a call holder. Long put: a long position in a put; being a put holder. Short call: a short position in a call; being a call writer. Short put: a short position in a put; being a put writer.