Call Options
What is the maximum loss for a call option buyer?
Option BUYERS max loss = premium. Option SELLERS max loss can be unlimited (naked calls).
Complete Analysis & Legal Rationale
The maximum loss for a call buyer is limited to the premium paid for the option. If the stock price stays below the strike price, the option expires worthless, and the buyer loses only the premium.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Unlimited loss applies to SELLERS of naked calls, not buyers.
Strike price is not the maximum loss - it's the price at which you can buy.
Matches the verified teaching point in the explanation.
This would be the intrinsic value calculation, not maximum loss.
Official Standard: Governs options accounts, approvals, and related supervisory requirements (verify current text).
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.