Zasha wrote a put option on Johnson & Johnson stock with a striking price of $53 per share.At the expiration date, Johnson & Johnson was selling for $50 per share.Which statement best describes the action that Zasha should or must take?

Question

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When writing a put option, the seller (Zasha) agrees to purchase the stock at the striking price ($53 per share) in the event that the option is exercised by the buyer. Since the stock is selling for $50 per share at expiration, the buyer of the put option will exercise their right to sell the stock to Zasha at the higher striking price. This means Zasha is obliged to buy the Johnson & Johnson shares at $53, even though the market price is $3 lower.

Zasha Wrote a Put Option on Johnson & Johnson Stock