What is the value of one November 35 put contract? $$\begin{array}{l}
\text { KNJ (KNJ) } \quad \text { Underlying stock price: } \mathbf { 3 0 . 8 6 }\
\begin{array} { l c c r }
\text { Expiration } & \text { Strike } &\underline{\text { Call }} &\underline{\text { Put }} \
\text { Aug } & 25 & 6.15 & \text { Last } \
\text { Nov } & 25 & 6.60 & .05 \
\text { Aug } & 35 & .10 & .10 \
\text { Nov } & 35 & .70 & \mathbf { 5 . 1 0 }
\end{array}
\end{array}$$
A)$70
B)$460
C)$510
D)$4,600
E)$5,100

Question

What is the value of one November 35 put contract? $$\begin{array}{l}
\text { KNJ (KNJ) } \quad \text { Underlying stock price: } \mathbf { 3 0 . 8 6 }\
\begin{array} { l c c r } 
\text { Expiration } & \text { Strike } &\underline{\text { Call }} &\underline{\text {  Put }} \
 \text { Aug } & 25 & 6.15 & \text { Last } \
\text { Nov } & 25 & 6.60 & .05 \
\text { Aug } & 35 & .10 & .10 \
\text { Nov } & 35 & .70 & \mathbf { 5 . 1 0 }
\end{array}
\end{array}$$
A)$70
B)$460
C)$510
D)$4,600
E)$5,100

Quizplus · Accepted Answer

The value of a put option is the difference between the strike price and the underlying stock price, if that difference is positive, or 0 if the difference is negative. In this case, the strike price is 35 and the underlying stock price is 30.86, so the difference is (35-30.86) = 4.14, which is positive. Therefore, the value of one November 35 put contract is $4.14 x 100 = $414. However, we need to account for the option premium, which is $5.10. So, the total value of the put contract is $414 - $5.10 = $408. Therefore, the closest answer choice is C) $510.

What Is the Value of One November 35 Put Contract