Final answer:
The payoff for being short 3 contracts on a 3-year TSLA put option with a strike price of $300 when the price at expiry is $200 would result in a loss. The actual calculation indicates a total loss of $30,000 ($10,000 per contract), not the options listed.
Step-by-step explanation:
If you are short 3 contracts on a 3-year TSLA put option with a strike price of $300, and the TSLA price at expiry is $200, the payoff can be calculated as follows:
Since you have a put option, you have the right to sell TSLA at the strike price of $300. However, since you are short the contracts, you are on the other side of this transaction; you have the obligation to buy the shares at the strike price if the option holder decides to exercise the option. Because the market price at expiry ($200) is less than the strike price ($300), the holder of the put option will exercise the option to sell shares at $300.
For each contract (which typically controls 100 shares of stock), the loss per contract will be the difference between the strike price and the market price, multiplied by the number of shares per contract. So that's ($300 - $200) * 100 = $10,000 per contract. As you're short 3 contracts, the total loss would be 3 * $10,000 = $30,000.
Therefore, the correct answer is:
d. -$900 (total loss) with the correct calculation being -$30,000 (total loss).