Calculate the profit per share for an investor that exercises a put option with a strike price of $60 when the stock is selling for $46 and the premium for the put option was $4.
A)($14)
B)($10)
C)$10
D)$18 Value of put at expiration = exercise price - stock price
= $60 - 46
= $14
Total profit = value of put option - premium paid

Question

Quizplus · Accepted Answer

The profit per share is calculated as the value of the put option at expiration ($14) minus the premium paid ($4), resulting in a profit of $10 per share.

Calculate the Profit Per Share for an Investor That Exercises