Suppose that a stock sells at a price of $60 on the expiration date. Compute the payoff to the seller of a put option if the option strike price is $80.
A) -$20
B) -$10
C) 0
D) $40

Question

Quizplus · Accepted Answer

A) The payoff to the seller is negative of the payoff to holder of call option. So, payoff or loss to seller of a call option is -(strike price - stock price) = -($80 - $60) = -$20.

Suppose That a Stock Sells at a Price of $60