SIE Exam Question 356: Answer and Explanation

Question: 356

Which of the following options positions obligates an investor to purchase stock?

• A. Long put
• B. Long call
• C. Short put
• D. Short call

Correct Answer: C

Explanation:

C - Short options positions have obligations that must be performed if the holder exercises the contract. Put writers have the obligation to buy stock at exercise when the put holders exercise the right to sell at the strike price.