Suppose you own one SXO put option with a strike price of 1,150. What is your payoff at maturity for this option if the S&P Canada 60 level is 1185?
A) $0
B) $3,500
C) -$2,000
D) $2,000
E) $5,000

Question

Quizplus · Accepted Answer

A put option gives the holder the right to sell the underlying asset at the strike price. If the market price is above the strike price, as in this case (1185 > 1150), the option is out of the money and will not be exercised, resulting in a payoff of $0.

Suppose You Own One SXO Put Option with a Strike