Question: Suppose you write one IBM put option with exercise price of $130. Option premium is $7. What is your net profit from the trade if

Suppose you write one IBM put option with exercise price of $130. Option premium is $7. What is your net profit from the trade if IBM trades at $145 on the expiration date? Assume that one option contract pertains to one share of stock.

a)

$0

b)

-$7 (loss of $7)

c)

$8

d)

$7

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