undue options
due options
naked options
total options
Answer is Wrong!
Answer is Right!
The correct answer is C. naked options.
A naked option is an option contract that is not
xmlns="http://www.w3.org/2000/svg" viewBox="0 0 576 512">
Subscribe on YouTube
covered by the underlying asset. This means that the seller of the option does not own the asset that they are obligated to deliver if the option is exercised. Naked options are considered to be a high-risk investment, as the seller is exposed to unlimited losses if the option is exercised.
A due option is an option contract that is about to expire. The buyer of a due option has the right, but not the obligation, to purchase the underlying asset at the strike price. The seller of a due option has the obligation to sell the underlying asset at the strike price if the option is exercised.
An undue option is an option contract that has already expired. The buyer of an undue option has no rights or obligations, and the seller of an undue option has no obligations.
A total option is an option contract that covers all of the shares of a particular stock. Total options are typically used by institutional investors to hedge their positions.