Three months ago,you purchased a put option contract on WXX stock with a strike price of $61 and an option price of $.60.The option expires today when the value of WXX stock is $63.50.Ignoring trading costs and taxes,what is your total profit on your investment?

Question

Quizplus · Accepted Answer

Since the stock price at expiration ($63.50) is above the strike price ($61), the put option will expire worthless. Therefore, the total profit is the negative of the option price paid, which is -$60.

Three Months Ago,you Purchased a Put Option Contract on WXX