Question

If I buy a put option at $130 with an option premium of $2, but the...

If I buy a put option at $130 with an option premium of $2, but the stock price is $105, what is my holding period return?

0 0
Add a comment Improve this question Transcribed image text
Answer #1

Profit = [Max{(Strike Price - Stock Price at the end),0}] - Put Premium

= [Max{($130 - $105),0}] - $2 = $25 - $2 = $23

Holding Period Return = Profit / Cost of Put = $23 / $2 = 11.5, or 1150%

Add a comment
Know the answer?
Add Answer to:
If I buy a put option at $130 with an option premium of $2, but the...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT