Question 687 option, no explanation
Which of the following statements about call options is NOT correct?
(a) Buyers of call options are required to pay an initial margin at the start.
(b) Call options are a zero-sum game in the sense that the winner gains at the expense of the loser.
(c) Buyers of call options have to pay the option price at the start.
(d) Buyers of call options do not care about the credit risk of the original call option seller since the contract is novated by the exchange.
(e) Speculators who sell call options hope that the underlying asset price falls.
Copyright © 2014 Keith Woodward