n NISM Certifications
NSM General NISM
Medium

The Loss for an Option Writer is unlimited – True or False?

Practice question from NISM Series I - Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. True

    Correct answer

  2. B

    False

Why this is the answer

A call option writer’s potential loss is unlimited if underlying price rises sharply; loss = Market Price - Strike - Premium.

Test yourself for real

Take a full General NISM mock test.

Same duration, same weighting, same difficulty distribution as the real exam — with explanations on every question.