Erin wrote a put option on Wesfarmers shares with a striking price of $53 price per share.At the expiration date,Wesfarmers was selling for $50 per share.Which statement best describes the course of action that Erin should or must take?
A) Erin will do nothing because the market price is lower than the striking price.
B) Erin is obliged to buy the Wesfarmers shares at $53,even though the market price is $3.00 lower.
C) Erin must sell the Wesfarmers shares for $53 per share.
D) Erin has the right to sell Wesfarmers shares at $3.00 per share over the market price.
Correct Answer:
Verified
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