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Consider you hold 5000 shares of BHP and at the same time have gone long on...

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Finance

Consider you hold 5000 shares of BHP and at the same time havegone long on put options on BHP. What is the payoff on the expirydate of the option, if (a) the stock price is below the exerciseprice? (b) the stock price is above the exerciseprice?     

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Answer Put option It is a derivative option that is bought when investor is bearish towards a particular security When price of the security goes down investor gains profit It is a right but not    See Answer
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Transcribed Image Text

Consider you hold 5000 shares of BHP and at the same time havegone long on put options on BHP. What is the payoff on the expirydate of the option, if (a) the stock price is below the exerciseprice? (b) the stock price is above the exerciseprice?     

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