Back to School With Marketing Guru Ed Usset #39

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If you pay a premium of 59 cents per bushel for a 940 November soybean put, what is the most money you can lose?

  1. $9.40 per bushel
  2. b. 59 cents per bushel
  3. c. your potential loss is unlimited

 

Answer (b): One of the main advantages to the purchase of options is that your potential losses are limited and measurable. If you pay 59 cents for a November 940 put – the right to sell November futures at $9.40 – the most money you can lose is the premium paid, or 59 cents per bushel.a.

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