Option holder exercises the option

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Reference no: EM131610517

You have written a put option on Diebold Inc. common stock. The option has an exercise price of $28 and Diebold's stock currently trades at $30.50. The option premium is $0.75 per contract.

a. What is your net profit if Diebold's stock price increases to $32 and stays there until the option expires?

b. What is your net profit on the option if Diebold's stock price decreases to $25 at expiration of the option and the option holder exercises the option?

Reference no: EM131610517

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