Gwen wrote a put option with a $15 strike price on RDX stock when the stock price was $16 per share. The option premium was $3. What is the maximum loss (per share) that Gwen could experience on her option position?
A) $3
B) $12
C) $14
D) $15

Question

Quizplus · Accepted Answer

The maximum loss occurs if the stock price falls to $0. Gwen would have to buy the stock at $15 (strike price) and would have received $3 as the premium, resulting in a net loss of $12 per share.

Gwen Wrote a Put Option with a $15 Strike Price