Chapter 06 · Section 6.1

Loss Potential

Market Outlook  : BEARISH
Profit Potential: practically 
                  unlimited
Loss Potential  :
Breakeven Point :

The investor's potential loss is:

a) unlimited.
No. Even if the market takes a dramatic rise in price levels, the holder of a put is under no obligation to exercise the option. He may let the option expire worthless.
b) limited.