Question

You purchased a put with a strike price of $37.5 and an option premium of $0.45. You simultaneously bought the stock at a price of $36 a share. What is your profit per share on these transactions if the stock price at expiration is $33.50?

Answer 1

Stock price	$   36.00
Option premium paid	$     0.45
Total cost	$   36.45
Stock price in market	$   33.50
Put option exercise price	$   37.50
Since Put option exercise price is higher, the option will be exercised.
Selling price	$   37.50
Cost	$ (36.45)
Gain	$     1.05
Gain in %age=	1.05/36.45
Gain in %age=	2.881%