- The price of Stock ABC is currently $70. A put option on 100 shares of Stock ABC has an exercise price of $75 and this option currently sells for a premium of $9.50.
A. What is the intrinsic value and the time value of the option today?
B. What is the break-even future stock price associated with the options?
C. If the stock price on the expiration date is $78, what is the net profit on this transaction to the person who wrote the option? The person who bought the option?