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The price of a stock is $67. A trader sells 5 put option contracts on the stock with a strike price of $70 when the option price is $4. The options are exercised when the stock price is $69. What is the trader's net profit or loss? O a. Gain of $1,500 O b. Loss of $1000 O c. Gain $500 O d. Loss of $500

The price of a stock is $67. A trader sells 5 put option contracts on the stock with a strike price of $70 when the option price is $4. The options are exercised when the stock price is $69. What is the trader's net profit or loss? O a. Gain of $1,500 O b. Loss of $1000 O c. Gain $500 O d. Loss of $500

Essentials Of Investments
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
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The price of a stock is $67. A trader sells 5 put option contracts on the stock with a strike price of $70 when the option price is $4. The options are exercised when the stock price is $69. What is the trader's net profit or loss? O a. Gain of $1,500 O b. Loss of $1000 O c. Gain $500 Od. O e. Loss of $500 Loss of $1,500
Transcribed Image Text:The price of a stock is $67. A trader sells 5 put option contracts on the stock with a strike price of $70 when the option price is $4. The options are exercised when the stock price is $69. What is the trader's net profit or loss? O a. Gain of $1,500 O b. Loss of $1000 O c. Gain $500 Od. O e. Loss of $500 Loss of $1,500
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