If you sell a put option,your maximum payoff is equal to:
A) The maximum of zero or the stock price − the exercise price.
B) The maximum of the exercise price − the stock price or zero.
C) zero.
D) the exercise price.

Question

Quizplus · Accepted Answer

When you sell a put option, the maximum payoff is the premium received, which is fixed and does not depend on the stock price, effectively making the maximum payoff zero beyond the premium.

If You Sell a Put Option,your Maximum Payoff Is Equal