Regarding the profitability of options, it is impossible for a producer who sells put options to lose more than the exercise price agreed in the option contract.

Question

Quizplus · Accepted Answer

When a producer sells put options, they receive a premium for taking on the obligation to buy the underlying asset at the exercise price if the option holder chooses to exercise the option. Therefore, the most a producer can lose is the difference between the exercise price and the current market price of the underlying asset at the time of exercise. It is not possible to lose more than the agreed exercise price.

Regarding the Profitability of Options, It Is Impossible for a Producer