n NISM Certifications
XIII NISM Series XIII
Medium

The primary purpose of a 'spread' in options trading is to _______.

Practice question from NISM Series XIII for SIF - Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Increase risk exposure

  2. B

    Reduce transaction costs

  3. Limit risk and potential loss

    Correct answer

  4. D

    Guarantee profit

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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