The price of a stock is $64.A trader buys 1 put option contract on the stock with a strike price of $60 when the option price is $10.When does the trader make a profit?
A) When the stock price is below $60
B) When the stock price is below $64
C) When the stock price is below $54
D) When the stock price is below $50

Question

Quizplus · Accepted Answer

The payoff must be more than the $10 paid for the option.The stock price must therefore be below $50.

The Price of a Stock Is $64