Roselle paid $250 to buy one put option with a strike price of $35. What is the maximum profit Roselle can earn on her option contract?
A) $100
B) $350
C) $3,250
D) Her profit potential is unlimited.

Question

Quizplus · Accepted Answer

The maximum profit on a put option is calculated as the strike price minus the premium paid, multiplied by the number of shares (usually 100 per contract). Here, it is ($35 - $0) * 100 - $250 = $3,250.

Roselle Paid $250 to Buy One Put Option with a Strike