Answer:
$200
Explanation:
Given that,
Price of a stock on February 1 = $48
Trader sells = 200 put options
Strike price = $40
Option price = $2
Options are exercised when the stock price = $39
Net profit (Loss):
= Stock price - Strike price + Premium
= $39 - $40 + $2
= $1
The net gain for one put option is $1.
Therefore, the total net gain for 200 put options is as follows:
= 200 × $1
= $200
Hence, the trader's net profit is $200.
