Question

A trader buys 10 Put Option contracts (1 contract is 100 shares) on AAPL with March 2019 expiration and strike price $150. The price of the option was $4.50. What are traders potential gains and losses? O A Unlimited loss, gain is limited to $4,500 O B ossis limited to $150,000, gain is limited to $4,500. O C Unlimited profit, loss is limited to $4,500 O D Profit is limited to $145,500, loss is limited to $4,500

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Answer : "C. Unlimited profit, loss is limited to $4500."

=> The option bought price is the bid from the buyer side, so buyer has a risk of losing the price if stock goes up, but the profit side is open for unlimited fly if stock drops. So, in the case loss is limited to $4.5 * 10 * 10 = $4500.

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