In order to buy an option, one must pay the writer a:
A) Strike price
B) Market price
C) Margin
D) Premium
E) Basis

Name: In order to buy an option, one must pay the writer a: A) Strike price B) Market price C) Margin D) Premium E) Basis
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Question

Quizplus · Accepted Answer

To buy an option, the buyer must pay the writer a premium. This is the price of obtaining the option itself, separate from the strike price, which is the price at which the buyer can later choose to buy or sell the underlying asset.

In Order to Buy an Option, One Must Pay the Writer