Question

The current price of the futures contract is $30. A six-month call option on the futures contract with a strike price of $30 is trading at a price of $4. What is the price of a six-month put option on this futures contract with the same strike price?

Answer 1

Put Price = $4

Step-by-step explanation:

We are applying Put Call Parity Theorem. Future Price + Put Price = Call Price + Strike Price

$30 + Put Price = $4 + $30

Put Price = $4 + $30 - $30

Put Price = $4

Thus, the price of six month put option = $4