Question

Draw the payoff picture at expiration for a long position in a put option that has a premium of $2.50 and a strike price of $65.

Answer 1

Payoff of a long put option = Max[X-S, 0] - P

S = underlying price at expiry,

X = strike price

P = premium paid

А в Stock price at Long Put 1 expiry Payoff $58 $4.50 $59 $3.50 $2.50 $1.50 $0.50 ($0.50) $64 ($1.50) $65 ($2.50) ($2.50) $67 ($2.50)| $68 ($2.50) $69 ($2.50) $70 ($2.50) $71 ($2.50) $72 ($2.50) $66

Long Put Payoff - Long Put Payoff $0.00 ATT 1 2 3 ($1.00) 4 5 6 7 8 9 10 11 12 13 14 15 ($2.00) ($3.00)