You buy a European put option on Up Down, Inc , stock with maturity T 6 months, and strike price K $54 00 You pay $1 00 for the option a Suppose that at maturity the stock 's market price is $50 00 What is your total profit or loss b What is the profit or loss when at maturity the stock price is $5...

a You exercise the put option you can buy t ...

You buy a European put option on Up & Down, Inc., stock with maturity T = 6

Question:

You buy a European put option on Up & Down, Inc., stock with T = 6 months, and K = $54:00. You pay $1.00 for the option.
a. Suppose that at the stock's market price is $50.00. What is your total profit or loss?
b. What is the profit or loss when at the stock price is $57.00?
Strike Price
In finance, the strike price of an option is the fixed price at which the owner of the option can buy, or sell, the underlying security or commodity. Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...