A customer buys 1 OEX Jan 530 Put @ $3. The overall market falls and the index closes at 529, while OEX 530 Put contracts close at $4.50. Which is the most profitable action?
A. Close the position
B. Exercise the position
C. Let the position expire
D. Roll-up the position

The customer should close the position. That way he will be able to earn the largest possible profit of $150 (= ($4.50 - $3.00) x 100). By closing the position the customer is ending his investment in that specific security by selling his investment option.

Answer Link

A customer buys 1 OEX Jan 530 Put @ $3. The overall market falls and the index closes at 529, while OEX 530 Put contracts close at $4.50. Which is the most profitable action? A. Close the position B. Exercise the position C. Let the position expire D. Roll-up the position

Respuesta :

Otras preguntas

A customer buys 1 OEX Jan 530 Put @ $3. The overall market falls and the index closes at 529, while OEX 530 Put contracts close at $4.50. Which is the most profitable action?
A. Close the position
B. Exercise the position
C. Let the position expire
D. Roll-up the position