Note - all Calls and Puts are lots of 100 shares and Price at expiration is $50.

Question

Note - all Calls and Puts are lots of 100 shares and Price at expiration is $50.

24. What is your profit from the following transaction (note per share costs quoted). Profit is how much you made or how much you didn't lose.

Short Put

$38

Strike Price

$8

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25. What is your profit from the following transaction (note per share costs quoted). Profit is how much you made or how much you didn't lose.

26. What is your profit from the following transaction (note per share costs quoted). Profit is how much you made or how much you didn't lose.

Short Put

$38

Strike Price

$8

premium received

Explanation / Answer

Exercise price = $50

Strike price = $38

Put Premium = $8

Total no of shares = 100

Total cost will be $8+$38 = $46

So for the short put, profit will be $50-$46 = $4 per share

For a lot of 100 shares, Profit = $4*100 = $400

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