Three weeks ago you purchased a July 50 put option on BDR st

Three weeks ago, you purchased a July 50 put option on BDR stock at an option price of $2.80. The market price of BDR stock three weeks ago was $48.22. Today, BDR stock is selling at $49.65 a share and the July 50 put is priced at $0.60. What is the intrinsic value of your put contract?

Solution

Answer:

What is the intrinsic value of your put contract?

Contract Intrinsic Value = ( $50 - $49.65) x 100 = $35