You sold ten put option contracts on PLT stock with an exercise price of $32.50 and an option price of $1.10. Today,the option expires and the underlying stock is selling for $34.30 a share. Ignoring trading costs and taxes,what is your total profit or loss on this investment?
A) -$2,900
B) -$1,100
C) $700
D) $1,100
E) $2,900

Question

Quizplus · Accepted Answer

The options expired worthless because the stock price ($34.30) is above the exercise price ($32.50). You keep the premium of $1.10 per option. For 10 contracts (1000 shares), the profit is 1000 * $1.10 = $1,100.

You Sold Ten Put Option Contracts on PLT Stock with an Exercise