If a firm writes (sells) European put options on pounds with an exercise price of $ 16/Pound, a maturity of 6 months and a premium of $0.05/Pound it will be hoping that after 6 months the spot rate of the Pound will be greater than the exercise priceles. $ 1.8/Pound), the spot rate of the Pound will be lesser than the exercise price (e.g. $ 1.40/Pound)