You own five put option contracts on XYZ with an exercise price of €25.What is the total intrinsic value of these contracts if XYZ is currently selling for €24.50 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. Here, it is €25 - €24.50 = €0.50 per share. Since you own five contracts, and each contract typically represents 100 shares, the total intrinsic value is €0.50 * 100 * 5 = €250.

You Own Five Put Option Contracts on XYZ with an Exercise