extremely risky
position, and may incur large losses if the value of the
underlying
instrument
increases above the exercise price. Such a loss can
exceed the equity in the call ... uncovered put option bears a risk of
loss if the value of the
underlying
instrument
declines below the exercise price. However, since stock prices cannot be lower than
zero ... could be
substantial if there is a significant decline in the value of the
underlying
instrument
and can exceed the equity in the put writer's
account.
3. For combination