You Write a Put Option on a Stock

question 5

Multiple Choice

You write a put option on a stock. The profit at contract maturity of the option position is ________, where X equals the option's strike price, ST is the stock price at contract expiration, and P0 is the original premium of the put option.

• A) max (P₀, X − S_T − P₀)
• B) min (−P₀, X − S_T − P₀)
• C) min (P₀, S_T − X + P₀)
• D) max (0, S_T − X − P₀)