You own six put option contracts on HOL stock with an exercise price of $30.What is the total intrinsic value of these contracts if HOL stock is currently selling for $26.00 a share?

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Quizplus · Accepted Answer

The intrinsic value of a put option is calculated as the exercise price minus the current stock price, multiplied by the number of shares per contract. Here, the intrinsic value per contract is ($30 - $26) * 100 = $400. For six contracts, the total intrinsic value is $400 * 6 = $2,400.

You Own Six Put Option Contracts on HOL Stock with an Exercise