Buying a put option - question about strike price?

Answers:3   |   LastUpdateAt:2012-10-27 07:43:02  

Question
Graciela Ayala
Asked at 2012-09-12 05:38:04
Therefore, I want to buy a put option on a stock that is currently trading at $ 1.50/share . The lowest available strike price is significantly higher than the current market price ( $ 2.50 ) . MedlinePlus MedlinePlus Say you buy the exercise price of $ 2.50 and the stock drops to $ 1.00/share . What will happen? MedlinePlus MedlinePlus I've never seen a strike price higher than the current market price of a put option .
Answer1hello??????Answered at 2012-09-28 08:28:03
astride her.
Answer2katie girlAnswered at 2012-10-14 06:34:03
well then you obviously have not been working with the options for long afterwards. MedlinePlus lol MedlinePlus if its strike price is 250 , and the underlying is trading at 150, and subsequently drops to 100 underlying by expiration , then it would be a little less than 50 , because you have to pay a premium of time . MedlinePlus MedlinePlus potential benefit would MedlinePlus ( Pnow - PEXP ) - Pput MedlinePlus subject to the limitation that the benefit can not be less than - Pput
Answer3StanleyAnswered at 2012-10-27 07:41:25
yes
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