Question

John sold a put option on Euro for $.02 per unit. The strike price was $1.30, and the spot rate at expiration date was $1.27. Also assume that there are 100,000 units in a Euro option. What was John’s net profit on the put option at expiration date?

Answer 1

1.30 1.27 John net profit on the put option No. of units in a Euro option contract 100000 Strike Price Spot rate at the time option excercised receivable, Amount proste (1.30-1.27) Amount perche de on every put $0.02 per unit Net amount (0.03 - 0:02) 0.01 Net Putit on 100vwo put option. 0.03 1ooo