What is your net profit on the option

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Reference no: EM131998234

You have purchased a put option on Pfizer common stock. The option has an exercise price of $34.50 and Pfizer's stock currently trades at $35. The option premium is $0.10 per share and the contract size of the put option is 100 shares.

a. What is your net profit on the option if Pfizer's stock price does not change over the life of the option?

b. What is your net profit on the option if Pfizer's stock price falls to $30?

Reference no: EM131998234

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