You own both a May 20 call and a May 20 put. If the call ﬁnishes in the money, then the put will:

Question

Quizplus · Accepted Answer

If the call finishes in the money, the put option will finish out of the money because the two options have opposite profit/loss structures. The call option profits when the underlying asset price increases, while the put option profits when the underlying asset price decreases. Therefore, if the call option is profitable, it means the underlying asset price has increased, causing the put option to be unprofitable.

You Own Both a May 20 Call and a May