Assume that an investor has a portfolio of NYSE blue‐chip common stocks currently worth $60,000. It is early April, and the investor is concerned about a market decline over the next couple of months. The S&P 100 is currently at 588.5, and an S&P 100 May 590 put is available for 10. In an attempt to protect the portfolio’s profits against a market decline, the investor purchases a put, which represents an aggregate exercise price of $59,000, calculated as (590 × 100 = $59,000). Assume that the market declines about 10 percent by the May expiration. If the OEX Index is 530 at that point, Put exercise price = 590. OEX Index price = 530. 60 $100 = $6,000