On July 14, an investor goes short on a put option for 100 shares of ABC Corporation common stock with a strike price of ₱9 with an expiration date of August 16, at an option premium of ₱1.50 per share. The market price of ABC on July 14 is ₱8. On August 16, the market price of ABC is ₱6. How much has the investor gained or lost on the option transaction? Disregard any brokerage commissions involved.
On July 14, an investor goes short on a put option for 100 shares of ABC Corporation common stock with a strike price of ₱9 with an expiration date of August 16, at an option premium of ₱1.50 per share. The market price of ABC on July 14 is ₱8. On August 16, the market price of ABC is ₱6. How much has the investor gained or lost on the option transaction? Disregard any brokerage commissions involved.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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On July 14, an investor goes short on a put option for 100 shares of ABC Corporation common stock with a strike price of ₱9 with an expiration date of August 16, at an option premium of ₱1.50 per share. The market price of ABC on July 14 is ₱8. On August 16, the market price of ABC is ₱6. How much has the investor gained or lost on the option transaction? Disregard any brokerage commissions involved.
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