Question

You purchased eight put option contracts with a strike price of $30 and a premium of $1.10. What is the total net amount you will receive for your shares if you exercise this contract when the underlying stock is selling for $26.50 a share

Answer 1

Answer:

$23120

Explanation:

The computation of the total net amount received is shown below:

Total Premium Paid

= 800 Option × $1.10

= $880

And,

Amount Received is

= 800 Option × $30

= $24000

So, Net Amount Received is

= $24000 - $880

= $23120