You Sold a Put Contract on EDF Stock at an Option

question 52

Multiple Choice

You sold a put contract on EDF stock at an option price of $.40. The option had an exercise price of $20. The option was exercised. Today,EDF stock is selling for $19 a share. What is your total profit or loss on all of your transactions related to EDF stock assuming that you close out your positions in this stock today? Ignore transaction costs and taxes.

• A) -$140
• B) -$60
• C) $40
• D) $60
• E) $140

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Definitions:

Explanation

A statement or account that makes something clear or understandable, often providing the reasons for a phenomenon or event.

Argument

A set of statements or reasons given with the aim of persuading others that an action or idea is right or wrong.

Crime Scene

A location where an illegal act has occurred and evidence of the crime might be collected and analyzed.

Explanandum

The term explanatory in nature, referring to a statement or phenomenon that needs to be explained.