SC Industries is currently trading at $30 per share. Consider a put option on SC Industries with an exercise price of $32. The intrinsic value of this put option is:
A)$0.
B)$2.
C)-$2.
D)$30.

Question

Quizplus · Accepted Answer

The intrinsic value of a put option is calculated as the exercise price minus the current stock price, provided this difference is positive. Here, it's $32 - $30 = $2. If the result is negative, the intrinsic value is considered to be $0, not a negative number.

SC Industries Is Currently Trading at $30 Per Share