On the expiration date for a put option with strike price of $10.00,premium $1.50 and the current spot price of $8.00,the holder will:

Question

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DThe holder will exercise the option because the spot price ($8.00) is below the strike price ($10.00), allowing them to sell shares at $10.00 that are only worth $8.00 in the market. This results in a profit of $0.50 per share ($10.00 - $8.00 - $1.50 premium), not $1.50, making D incorrect. My previous response was incorrect in stating D as a correct choice; the correct profit calculation was overlooked.

On the Expiration Date for a Put Option with Strike