An investor holds 200 shares of Company Z, with a current trading price of $26 per share.
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Question:
An investor holds 200 shares of Company Z, with a current trading price of $26 per share. The investor believes that the stock price is likely to go down, therefore he purchased two put option contracts on Company Z’s shares. The put options have a strike price of $24 and a premium of $1.50. Determine the investor’s profit or loss if the stock price falls to $20.
Related Book For
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones
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