John sold a put option on euro for 04 per unit the strike, Financial Management

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John sold a put option on euro for 04 per unit the strike

John sold a put option on Euro for $.04 per unit. The strike price was $1.30, and the spot rate at the time the option was exercised was $1.27.

Assume John immediately sold off the Euro received when the option was exercised.

Also assume that there are 50,000 units in a Euro option. What was John's net profit on the put option?

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Financial Management: John sold a put option on euro for 04 per unit the strike

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Financial Management: John sold a put option on euro for 04 per unit the strike

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