If a new option contract is listed on an option exchange and only one trader buys one contract in the first day, the open interest after that day is:
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A. B. C. D.D
The correct answer is D. one contract.
Open interest refers to the total number of outstanding or open option contracts that exist in the market. It represents the number of contracts that have been bought or sold but have not yet been offset or exercised.
In this scenario, a new option contract is listed on an option exchange. When only one trader buys one contract in the first day, it means that there is a single contract that has been bought and is now open. Since there is only one contract in existence after the first day, the open interest would be one contract.
The open interest will change as more traders enter the market and buy or sell contracts. For example, if another trader buys one contract on the second day, the open interest will increase to two contracts. However, based on the information provided in the question, the open interest after the first day is one contract.