You own 2 SPX put options with a strike of 1744. What is the payoff at maturity for this option contract if the S&P 500 index is 1722?
A)−$4,400
B)−$44
C)$0
D)$44
E)$4,400

Question

Quizplus · Accepted Answer

The payoff for a put option is calculated as the maximum of either 0 or the strike price minus the stock price, times the number of contracts, times the contract multiplier (usually 100 for stock options). Here, the calculation is (1744 - 1722) * 2 * 100 = $4,400.

You Own 2 SPX Put Options with a Strike of 1744