Jennifer purchased 5 put option contracts on Winslow Mfg. stock. The option premium was $0.20 and the strike price was $17.50. On the expiration date, the stock was selling for $17.75 a share. What is the total payoff on the option contracts?
A) -$100
B) -$50
C) $0
D) $50
E) $150

Question

Quizplus · Accepted Answer

The stock price at expiration ($17.75) is above the strike price ($17.50), so the put options expire worthless. The payoff is $0.

Jennifer Purchased 5 Put Option Contracts on Winslow Mfg