Question

Suppose on 30th June a stock exercise price is
5300, stock current value is Value is 5325, Call
Premium is Rs. 100, Put Premium is Rs. 30,
Expiration Date is 30th July, Contract size is
50. What is the net profit per contract of put
holder on expiration date if stock value on
30th July is 5325.
-1250
-1500
-2500
1250
​

Answer 1

$Premium = intrinsic value + time value</p><p></p><p>$

The net profit will be

$30 \times 25 \times 2 = 1500$

So Rs 1500 will be net profit on expiry date of contract.

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Answer 2

Answer:

The correct option is 1500.

Explanation:

Given:-

On 30th June a stock exercise price = Rs 5300

Stock current value = Rs 5325

Call Premium = Rs. 100

Premium = Rs. 30

Contract size = 50

On 30th July = Rs 5325

Premium = intrinsic value + time value

Net profit will be

30 × 25 × 2 = 1500

Hence, Rs 1500 will be the net profit on the expiry date of the contract.

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