You bought a put with a strike price of $35. The current stock price is $34. What is the current payoff value of this option?
A)−$2
B)−$1
C)$0
D)$1
E)$2

Question

Quizplus · Accepted Answer

The payoff of a put option is calculated as the strike price minus the current stock price. Therefore, the payoff value of this put option is $35 - $34 = $1. However, since the option was purchased, this value is negative, so the correct answer is (D) $1.

You Bought a Put with a Strike Price of $35