Question: please provide a numerical answer and what you used to find that answer, thank you! Suppose that you write a put contract with a strike

 please provide a numerical answer and what you used to find

please provide a numerical answer and what you used to find that answer, thank you!

Suppose that you write a put contract with a strike price of $40 and an expiration date in three months. The current stock price is $41 and the contract is on 100 shares. What have you committed yourself to? How much could you lose in a worst case scenario? In other words, what is the total amount you could lose on this deal

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!