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At the time of the initiating the contract, the price of a stock is $65. A trader sells 5 naked put option contracts on the stock with a strike price of $75 when the option price is $5. Today, the options expires today and the stock price is $70. What is the trader's net profit or loss? Loss of $500 Gain of $500 Loss of $2,000 Loss of $1,500 Gain of $2,000 Gain of $1,500

At the time of the initiating the contract, the price of a stock is $65. A trader sells 5 naked put option contracts on the stock with a strike price of $75 when the option price is $5. Today, the options expires today and the stock price is $70. What is the trader's net profit or loss? Loss of $500 Gain of $500 Loss of $2,000 Loss of $1,500 Gain of $2,000 Gain of $1,500

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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At the time of the initiating the contract, the price of a stock is $65. A trader sells 5 naked put option contracts on the stock with a strike price of $75 when the option price is $5. Today, the options expires today and the stock price is $70. What is the trader's net profit or loss? Loss of $500 Gain of $500 Loss of $2,000 Loss of $1,500 Gain of $2,000 Gain of $1,500
Transcribed Image Text:At the time of the initiating the contract, the price of a stock is $65. A trader sells 5 naked put option contracts on the stock with a strike price of $75 when the option price is $5. Today, the options expires today and the stock price is $70. What is the trader's net profit or loss? Loss of $500 Gain of $500 Loss of $2,000 Loss of $1,500 Gain of $2,000 Gain of $1,500
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