A transaction in which a writer covers a position by purchasing an option is called:

A. A closing sale

B. A closing purchase

C. An opening sale

D. An opening purchase

Expert Solution

Answer : Correct option is (B.) A closing Purchase.

Reason :

In closing purchase generally a person by purchasing the option wants to reduce or eliminate that the short position therefore to cover the short position A transaction in which a writer covers a position by purchasing an option is Closing Purchase.

jeff jeffy answered 2 years ago

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