VSNL's share price is expected to decline due to non-payment of its dues by the Worldcom, lowering margins and other negative sentiments in the market. The current share price is sh. 123.70 and the daily volatility of the VSNL share is 2.74 percent. Based on the Value at Risk (VAT), the probability of the share price going above Sh. 142.5 is quite low. The put on the VSNL share with an exercise price of Sh. 150 is selling for Sh. 7.50. 

Should you buy the put?

Answer rating: 100% (QA)

The decision to buy a put option should be based on whether you believe the price of the underlying ... View the full answer