alleryStart learning →A trader writes a put with strike Rs 40 and receives Rs 3. What is the largest possible loss per share?
ARs 3
BRs 37
CRs 40
DRs 43
Answer & Solution
Correct answer: B. Rs 37
The stock can fall to zero, so the writer loses the strike less the premium received, 40 minus 3 = Rs 37.
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