You own 4 put option contracts on ALZ stock. The contracts have a $17.50 strike price and you paid an option premium of $.40. What is the break-even stock price?
A)$17.10
B)$17.30
C)$17.50
D)$17.70
E)$17.90

Question

Quizplus · Accepted Answer

To break even on a put option, you need the stock price to be below the strike price by the amount of the premium you paid. 
Break-even = Strike price - premium
Break-even = $17.50 - $0.40
Break-even = $17.10

You Own 4 Put Option Contracts on ALZ Stock