Question

You bought a put option paying rs 200 as premium the market lot is 500 shares per lot, the stock price falls from rs 1500 rs 1400 on expiry what is your net profit

Answer 1

Explanation:

Put option is exercised when the spot market price on the date of maturity is less than the strike price.

Here in the question you have not mentioned the strike price thus, we cannot conclude regarding the net profit.

you can use the payoff formula to determine the net profit.

payoff = K - St