Question

You have written a put option on Diebold Inc. common stock. The option has an exercise price of $ 28 and Diebold’s stock currently trades at $ 30.50. The option premium is $ 0.75 per contract.
a. What is your net profit if Diebold’s stock price increases to $ 32 and stays there until the option expires?
b. What is your net profit on the option if Diebold’s stock price decreases to $ 25 at expiration of the option and the option holder exercises the option?



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  • CreatedJanuary 27, 2015
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