Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

On May 20th, a trader buys two hundred December put options (= 2 option contracts) with a strike price of $21. The stock price is

On May 20th, a trader buys two hundred December put options (= 2 option contracts) with a strike price of $21. The stock price is $20.88 and the option price is $5.15. At the expiration, the stock price becomes $18.62. What is the option profit to the trader? If it is a loss, then enter a negative value.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Finance With Connect Access Card

Authors: Stephen Ross ,Randolph Westerfield ,Jeffrey Jaffe

10th Edition

1259672484, 978-1259672484

Students also viewed these Finance questions

Question

What is Larmors formula? Explain with a suitable example.

Answered: 1 week ago