You purchased one SPX put option with a strike of 1,400.You wrote one SPX put option with the same maturity date and a strike of 1,300.At maturity,what is your total payoff if the S&P 500 index is 1,320?
A) -$8,000
B) -$2,000
C) $2,000
D) $4,000
E) $8,000

Question

Quizplus · Accepted Answer

The 1,300 put is not exercised.
Payoff on 1,400 put purchased = (1,400 - 1,320) × $100 = $8,000

You Purchased One SPX Put Option with a Strike of 1,400.You