Suppose you purchase five put contracts on Company ABC The s

Suppose you purchase five put contracts on Company ABC. The strike price is $54, and the premium is $3. If, at expiration, the stock is selling for $47 per share, what are your put options worth? What is your net profit?

as the strike price is higher than the stock selling price so each put option is worth strike price-selling price, i.e., $(54-47) = $7. For 5 put options = $7*5 = $35. overall profit = worth of put options - premium = $(35-5*3) = $20

Suppose you purchase five put contracts on Company ABC The s

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