SIE Exam Question 409: Answer and Explanation

Question: 409

The writer of an option contract is said to have:

• A. a long option position
• B. a long stock position
• C. a short option position
• D. a short stock position

Correct Answer: C

Explanation:

C: Shorting an option contract is doing an opening sale transaction, which is writing an option contract, generating premium income.