Company: PDCC
Filing Date: 2025-07-18
Form Type: N-2
Source: 0001214659-25-010613
Chunk: 216

Company: Pearl Diver Credit Co Inc.
Filing Date: 2025-07-18
Form: N-2
Chunk 216
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 of the underlying security during the option period. If an option
is exercised, the exercise price, the premium received and the market value of the underlying security determine the gain or loss realized
by the Company.

When the Company writes an
option, if the underlying securities do not increase or decrease, as applicable, to a price level that would make the exercise of the
option profitable to the holder thereof, the option will generally expire without being exercised and the Company will realize as profit
the premium received for such option. When a call option of which the Company is the writer is exercised, the Company will be required
to sell the underlying securities to the option holder at the strike price and will not participate in any increase in the price of such
securities above the strike price. When a put option of which the Company is the writer is exercised, the Company will be required to
purchase the underlying securities at a price in excess of the market value of such securities.

The Company may purchase
and write options on an exchange or OTC. OTC options differ from exchange-traded options in several respects. They are transacted directly
with dealers and not with a clearing corporation or futures commission merchant, and therefore entail the risk of non-performance by the
dealer. OTC options are available for a greater variety of securities and for a wider range of expiration dates and exercise prices than
are available for exchange-traded options. Because OTC options are not traded on an exchange, pricing is normally done by reference to
information from a market maker. It is the SEC’s position that OTC options are generally illiquid. The market value of an option
generally reflects the market price of an underlying security. Other principal factors affecting market value include supply and demand,
interest rates, the pricing volatility of the underlying security and the time remaining until the expiration date.

Risks.Risks associated
with options transactions include: (i) the success of a hedging strategy may depend on an ability to predict movements in the prices of
individual securities, fluctuations in markets and movements in interest rates; (ii) there may be an imperfect correlation between the
movement in prices of options and the securities underlying them; (iii) there may not be a liquid secondary market for options; and (iv)
though the Company will receive a premium when it writes covered call options, it may not participate fully in a rise in the market value
of the underlying security.

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Swaps, Caps, Floors, Collars and Swaptions