The short position in a put option has the obligation to buy if the option is exercised.

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The short position in a put option has the obligation to buy if the option is exercised. Isn’t this counter to the notion that a short position indicates a “sell”? Explain your answer.

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An Introduction to Derivative Securities Financial Markets and Risk Management

ISBN: 978-0393913071

1st edition

Authors: Robert A. Jarrow, Arkadev Chatterjee

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Question Posted: Dec 02, 2015 03:04 AM

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The short position in a put option has the obligation to buy if the option is exercised.

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An option buyer pays a premium to acquire certain rights This is the right to sell ...View the full answer

An Introduction to Derivative Securities Financial Markets and Risk Management

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