Problem:
Suppose you believe that STR Holdings stock price is going to decline from its current level of $82.50 sometime during the next 5 months. For $510.25 you could buy a 5-month put option giving you the right to sell 100 shares at a price of $85 per share. If you bought this option for $510.25 and STR Holdings stock price actually dropped to $35,
Required:
Question: What would your pre-tax net profit be?