You purchase one IBM March 120 put contract for a put premium of $10.The maximum profit that you could gain from this strategy is _________.
A) $120
B) $1,000
C) $11,000
D) $12,000

Question

Quizplus · Accepted Answer

The maximum profit from a put option is calculated as the strike price minus the premium paid, multiplied by the number of shares (100 per contract). Here, it's ($120 - $10) * 100 = $11,000.

You Purchase One IBM March 120 Put Contract for a Put