Series 7 - General Securities Representative Exam
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An options trader is bullish on a certain asset. He doesn't want to risk the options expiring worthless on him; so he buys calls far out in time. What is his maximum profit when buying calls that have plenty of time until expiration?
Premium of the calls
A
Premium of the calls minus theta
B
Unlimited
C
The calls' delta + the premium outlay
D
Explanations
The maximum profit when buying calls of any kind is unlimited