Homework Answers
The maximum payoff that a long put option can have is the strike price. This happens when the stock price goes to zero.
There is no maximum payoff for a long call option. Theoretically, the stock price can go up to any value. As the stock price keeps going up, the payoff of the long call option keeps going up. There is no limit.
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What is the maximum payoff that a long put option can have? How about a long...
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