Derivatives Q17

0. Which of the following statements about options is most accurate?

A
An option is the right to buy or the right to sell the underlying.
B
An option is the right to buy and sell, with the choice made at expiration.
C
An option is an obligation to buy or sell, which can be converted into the right to buy or sell.

Answer
Comment
Array

Option : A
Explanation : An option is strictly the right to buy (a call) or the right to sell (a put). It does not provide both choices. Similarly, the right to convert is an obligation, not a right.

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