Option Trading 8 Leslie holds a put option on one corn futures contract, with strike K=$3.6675...
Option Trading 8
Leslie holds a put option on one corn futures contract, with strike K=$3.6675 per bushel. The option is about to expire, and the futures price is $3.4850 per bushel. Find Leslie's payoff.
Homework Answers
Strike price = $3.6675 per bushel
Future price on expiration = $3.4850
Payoff under Put option = Strike price - Security price at expiration
(it cannot be below 0 or negative, as we will not exercise option, if strike price is less than security price at expiration)
=3.6675-3.4850
=$0.1825
So Leslie's payoff is $0.1825
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Option Trading 8
Leslie holds a put option on one corn futures contract, with
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