Chapter 06 · Section 6.1

Loss Potential

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

The investor's potential loss is:

a) unlimited.
No. Even if the market remains stable, the holder of an option, call or put, is under no obligation to exercise the option. He may let the options expire worthless.
b) limited.