How Does the Risk Profile Differ between the Two? ⎊ Path

How Does the Risk Profile Differ between the Two?

The risk profile for a DITM option buyer is limited to the premium paid, but the option has an expiration. Owning the underlying asset has no expiration but exposes the holder to the full risk of the asset's price decline, requiring more capital.

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Compare the Risk Profile of a Covered Call to a Naked Call

Glossar

Risk Profile

Profile ⎊ A risk profile delineates an individual's or entity's willingness and capacity to take on financial risk in pursuit of returns.