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On February 21, 2020, SPY an index fund tracking the S&P 500 is valued at $332.97. You are worried about reports of a new disease
On February 21, 2020, SPY an index fund tracking the S&P 500 is valued at $332.97. You are worried about reports of a new disease that was first reported and its impact on the market. You decide to purchase put options on SPY. The put options have a strike price of $316.67 and the put premium is $23.82. It turns out that your worried were warranted, and SPY is valued at $266.53 on the maturity date of your options. The value of the option is ...
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