Asked by Alexandra Velicky on May 04, 2024
Verified
Selling a put option may give you the obligation to buy shares.
Selling A Put Option
An options trading strategy where an investor sells a put contract, granting the buyer the right to sell the underlying asset at a predetermined price, while the seller bets on the asset's price not falling below that level.
Obligation To Buy
A commitment or requirement to purchase a specified asset at a predetermined price, typically within a certain timeframe.
- Gain insight into the duties and entitlements accompanying the acquisition and disposition of call and put options.
Verified Answer
SH
Sonia HanifaMay 06, 2024
Final Answer :
True
Explanation :
When you sell a put option, you are agreeing to buy the underlying stock at the strike price if the option is exercised by the buyer, thus obligating you to purchase shares.
Learning Objectives
- Gain insight into the duties and entitlements accompanying the acquisition and disposition of call and put options.