You write a put option on a stock.The profit at contract maturity of the option position is ___________ where X equals the option's strike price,S_T is the stock price at contract expiration and P₀ is the original premium of the put option. A) Max(P₀, X - S_T - P₀) B) Min(-P₀, X - S_T - P₀) C) Min(P₀, S_T - X + P₀) D) Max(0, S_T - X - P₀)

Question

Quizplus · Accepted Answer

The Answer of You write a put option on a stock.The profit at contract maturity of the option position is ___________ where X equals the option's strike price,S_T is the stock price at contract expiration and P₀ is the original premium of the put option. A) Max(P₀, X - S_T - P₀) B) Min(-P₀, X - S_T - P₀) C) Min(P₀, S_T - X + P₀) D) Max(0, S_T - X - P₀)

You Write a Put Option on a Stock