You sold eight put option contracts on PLT stock with an exercise price of $32.50 and an option price of $1.10.Today,the option expires and the underlying stock is selling for $34.30 a share.Ignoring trading costs and taxes,what is your total profit or loss on this investment?

Question

Quizplus · Accepted Answer

The options expired worthless since the stock price ($34.30) is above the exercise price ($32.50). You keep the premium received: 8 contracts * 100 shares/contract * $1.10 = $880 profit.

You Sold Eight Put Option Contracts on PLT Stock with an Exercise