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options are securities that provide the potential to act (to buy or sell something) or to do nothing. buyers of options who do nothing will suffer a loss equal to what?

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varshamittal029

The buyers of options who do nothing will suffer a loss equal to the current value of the underlying asset.

  • Underlying is the financial asset on which the price of the derivative is based.
  • Options are an example of derivatives. A derivative is a financial instrument whose price is based on another asset.
  • Underlying assets can be used to identify the items in the arrangement that gives value to the contract.
  • The underlying support is the security contained in the contract that the parties agree to exchange as part of the derivative contract.
  • The underlying asset represents the asset from which the derivative derives its value.
  • Knowing the value of the underlying asset helps traders determine the appropriate action (buy, sell, or hold) in derivatives

To learn more about the underlying asset refer to:

https://brainly.com/question/28212271

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