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Apple currently trades at $422. You can buy a 3-month put option on Apple stock with...

Apple currently trades at $422.

You can buy a 3-month put option on Apple stock with a strike price of $417 for $25.1. How much do you have to pay to establish a protective put position for a single unit?

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Answer #1

Current price, S0 = $ 422

Strike price, K = $ 417

Option premium = $ 25.17

Here, we have to pay an amount equal to option premium in order to establish a protective put position.

So, premium has to be paid to establish a protective put position.

That is $ 25.10.

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