Suppose you purchase a put option on Asset XYZ that has an exercise price of $100. The option price is $3 per share. Suppose that on the expiration date, you exercise your option at the current price of $96. What is your net profit or loss per share?

Question

Quizplus · Accepted Answer

Since the exercise price is $100 and the current price on the expiration date is $96, you are able to sell the asset for $4 more than the exercise price. Therefore, your profit per share is $4-$3 = $1.

Suppose You Purchase a Put Option on Asset XYZ That