A. increase in stock price
B. decrease in stock price
C. increase in maturity duration
D. decrease in maturity duration
✅ The correct answer is option B.
Considering call option writing, probability that a buyer would have positive payoff increases with the decrease in stock price. Writing a call option means that you are selling a call option. If you sell a call (also know as a “short call”) then you are obliged to sell stock at the strike price.
Considering call option writing, probability that a buyer would have positive payoff increases with the decrease in stock price. Writing a call option means that you are selling a call option. If you sell a call (also know as a “short call”) then you are obliged to sell stock at the strike price.