Register
A customer sells 1 ABC Jul 40 Put at $6 when the market price of ABC is $38. The market falls to $25 and the customer is assigned. The customer then sells the stock in the market. The loss is:
105k views
4 votes
A customer sells 1 ABC Jul 40 Put at $6 when the market price of ABC is $38. The market falls to $25 and the customer is assigned. The customer then sells the stock in the market. The loss is:

User Amnon Shochot
by
5.4k points

1 Answer

1 vote

Answer: 9 points or $900

Step-by-step explanation:

Given:

Market price = $38.

Fall = $25.

Premium = $6.

When exercised, the customer must buy the stock for $40. But he goes ahead to sell the stock at $25 for a 15 point loss. Hence since 6 points was collected as the premium, the net loss is 9 points or $900. This means the customers loss is $900.

User Imjared
by
5.0k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

5.7m questions

7.4m answers

Other Questions

_____ reminds customers and clients that they made a good choice in selecting a company with which to do business, or it reminds them of the good qualities of their purchase.​
On august 1 the darius co. purchased a photocopy machine for $8,000. the estimated annual depreciation on the machine is $1,680. if the company prepares annual financial statements on december 31, the
When president obama was elected, the u.s. economy was in trouble, and has slid into a recession. consumer spending was low and getting worse. in an effort to stop the decline, president obama proposed
Ensuring that an individual is who they claim to be is the function of _____. select one: a. confidentiality b. authorization c. availability d. authentication e. nonrepudiation
The current market price for good y is above the equilibrium price, and then the price of a subsitute good, x, increases. the demand curve for good y shifts as a result. what is the likely outcome of the
Link Copied!