Roselle paid $250 to buy one put option with a strike price of $35. What is the maximum profit Roselle can earn on her option contract?

Name: Roselle paid $250 to buy one put option with a strike price of $35. What is the maximum profit Roselle can earn on her option contract?
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Question

Quizplus · Accepted Answer

The maximum profit on a put option is calculated as the strike price minus the premium paid, multiplied by the number of shares (usually 100 per contract). Here, it's ($35 - $0) * 100 - $250 = $3,250.

Roselle Paid $250 to Buy One Put Option with a Strike