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A currency speculator writes a put option with a strike of $1.0700/SF on a notional...

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Finance

A currency speculator writes a put option with a strike of $1.0700/SF on a notional amount of SF 1 million. The premium is $0.02/SF. At the expiry, the SF appreciates to $1.0825/SF. Which is the most appropriate statement of the following?

A. The option expires OTM and the speculators loss is the premium of $20,000.

B. The option is ITM and the writer receives a net profit of $20,000.

C. The option expires OTM and the writers profit is the amount of premium of $20,000.

D. The option expires OTM and the writers net profit is $105,000

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