Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Apple (AAPL) share price is currently $500. A put option based on AAPL has a strike price of $520 and is trading at a price
Apple (AAPL) share price is currently $500. A put option based on AAPL has a strike price of $520 and is trading at a price of $70. It is a fact that every option trade requires one party willing to take the long position and another party willing to take the short position. It is not hard to understand why a trader might enter a long position in this put option. But why would anyone be willing to enter a short position in this AAPL put option? Briefly explain the rationale for entering a short position in this AAPL put option. Under what circumstances could they benefit from this short put position
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started