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Suppose a put option on XYZ stock has a price (or premium) of $5.00 and a strike price of $46. You decide to short (or
Suppose a put option on XYZ stock has a price (or "premium") of $5.00 and a strike price of $46. You decide to short (or write) the option, and suppose that at expiration XYZ stock sells for $56. What is your payoff at expiration and what is your profit? Below, be careful to note some numbers have negative signs and some do not. Payoff = -$10, Profit = +$5 a. b. Payoff = $0, Profit = -$5 Payoff = -$10, Profit = = -$15 O c. d. Payoff = -$10, Profit = -$5 Payoff = $0, Profit = -$5 e. Of. Payoff = $10, Profit = +$5 Payoff = +$ 10, Profit = g. -$5 h. Payoff = +$10, Profit = +$15 O i. Payoff = $0, Profit = +$5 O j. Payoff = $0, Profit = -$15
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