IFMP Financial Derivative Traders Certification (FDTC), Pakistan Practice Questions - IFMP Financial Derivative Traders Certification (FDTC), Pakistan Exam

Leverage in derivatives typically means that:

A small change in the underlying can produce a proportionally larger P&L relative to the initial margin or premium outlay Position size is legally capped at one share Losses can never exceed the premium on short option positions Margin is never required

Correct Answer:

A small change in the underlying can produce a proportionally larger P&L relative to the initial margin or premium outlay

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