Short puts. Suppose you are the owner of U.S.-based shoe manufacturing company and just sold specialized sports shoes worth one million Euros () to Dorothy Perkins in Europe. The payment is scheduled in one year. You are concerned that the value of the Euro might fall before next year and reduce your profits. You call your bank and purchase a put option with a strike price of $2/ and a premium of $0.10 /. Assuming the U.S. interest rate is 10%, the total premium cost at year's end would be $0.11/ (i.e., the $0.10/ premium plus a $0.01 per Euro interest cost).

The profit or loss profile of the short put is just the opposite of the long put. Present the gains or losses for short put using the above example, assuming that the maturity market (spot) prices were given as in the first column of the table.

Profit/Loss Profiles for Short Puts

Market (Spot) Price at Maturity	Gains/Losses per Euro
$1.60/Euro
$1.70/Euro
$1.80/Euro
$1.89/Euro
$2.00/Euro
$2.20/Euro
$2.30/Euro
$2.50/Euro