Question

All of the following options and options strategies either perform best or require any exercise to be performed at expiration EXCEPT:[A] Those which are issued European-Style.[B] A straddle options position.[C] Those which are issued American-Style.[D] An options position using the Black-Scholes method.

Answer 1

Answer:

C is the right option

Explanation:

From all the options, only the American-Style option is exercise before expiry. All other options can only be exercised at expiration. Sellers in the straddle options allows the option to expire to gain maximum profit. The Black-Scholes method typically adopts the European-Style strategy, which is also exercised at expiration.