call option, all the credit risk is on the buyer, and it is the value of the option (all the time?) put option, same, from day 1 to the maturity. option seller has no credit risk whatsoever. Is above a correct statement? I know it’s late. Hope someone is still there. Thanks.
I believe your statement is correct.
Thanks, Hezagenius! Feel better now.
Does European versus American make a difference to credit risk ?
European, only have potential credit risk (at maturity) but American may have current risk, is that fair?
I’m thinking what should be the amount of the current credit risk for American, the market value or intrinsic value? hope won’t be on the exam