You Sold Ten Put Option Contracts on PLT Stock with an Exercise

question 29

Multiple Choice

You sold ten put option contracts on PLT stock with an exercise price of $32.50 and an option price of $1.10. Today,the option expires and the underlying stock is selling for $34.30 a share. Ignoring trading costs and taxes,what is your total profit or loss on this investment?

• A) -$2,900
• B) -$1,100
• C) $700
• D) $1,100
• E) $2,900

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Definitions:

Syllogism

A logic problem containing two premises and a conclusion; the syllogism is valid if the conclusion follows logically from the premises.

Premises

Statements or propositions from which conclusions are drawn in logical arguments.

Conclusion

The end or finish of an event, process, or text; a judgment or decision reached by reasoning.

Logical Relationship

The connection between ideas that follows a systematic pattern of reasoning, often governed by specific rules or laws of logic.