The price of a stock is $67. A trader sells 5 put option contracts on the stock (each contract gives the right to sell 100 shares) with a strike price of $70 when the option price is $4. At the expiration date the stock price is $69. What is the trader’s net profit or loss?
The price of a stock is $67. A trader sells 5 put option contracts on the stock (each contract gives the right to sell 100 shares) with a strike price of $70 when the option price is $4. At the expiration date the stock price is $69. What is the trader’s net profit or loss?
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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The price of a stock is $67. A trader sells 5 put option contracts on the stock (each contract gives the right to sell 100 shares) with a strike price of $70 when the option price is $4. At the expiration date the stock price is $69. What is the trader’s net profit or loss?
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