In stock option, a little chance exists for large gain on stock when price of stock

have volatile movement
moves freely
rarely moves
stays same

The correct answer is A. have volatile movement.

A stock option is a contract that gives the buyer the right, but not the obligation, to buy or sell a stock at a specified price on or before a specified date. The price at which the stock can be bought or sold is called the strike price. The date by which the option must be exercised is called the expiration date.

The value of a stock option depends on the price of the underlying stock, the strike price, the expiration date, and the volatility of the stock. Volatility is a measure of how much the price of a stock moves up and down. A stock with high volatility is more likely to experience large price swings than a stock with low volatility.

When the price of a stock is volatile, there is a greater chance that the option will be in the money, which means that the buyer of the option will make a profit. This is because the price of the stock is more likely to move above or below the strike price.

When the price of a stock is not volatile, there is less chance that the option will be in the money. This is because the price of the stock is less likely to move above or below the strike price.

Therefore, the answer to the question is A. have volatile movement.

Exit mobile version