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Consider a short Put Option position on a stock of Company XYZ. Consider that the agreed price is $75. Suppose it is an American type
Consider a short Put Option position on a stock of Company XYZ. Consider that the agreed price is $75. Suppose it is an American type option. With a $5 premium. Today the XYZ share price is trading on the spot market at $78. A) How do you find the option: In, Out, or At the money? B) What is the intrinsic value of the option? C) What would be the financial gain/loss in case of exercising? D) Plot the payment profile.
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