What is the maximum potential loss for the trader


Question: The stock price of BAC is currently $150 and a put option with strike price of $150 is $10. A trader goes long 300 shares of BAC stock and long 3 contracts of the put options with strike price of $150.

a. What is the maximum potential loss for the trader?

b. When the stock price is $161 on the expiration, what is the trader's net profit?

Request for Solution File

Ask an Expert for Answer!!
Finance Basics: What is the maximum potential loss for the trader
Reference No:- TGS03230617

Expected delivery within 24 Hours