Course Name: Options Trading Strategies In Python: Basic, Section No: 1, Unit No: 7, Unit type: Quiz
Here i choose INR 10 loss and the result is showing the same but marking my ans as wrong
Hi Shubhankar,
A put option is bought when you are expecting the price to fall. If the strike price is at 800 and you think it will go down, you will buy the put option. At expiry, the stock price is 750, you can sell the stock at 800 which was the agreed-upon strike price. The option seller has to honour this arrangement.
In contrast, a put option is sold (or written) when you are expecting the price to increase.
In other words, if the stock price at expiry is above the strike price, the put option will expire worthless, and the trader who sold the option (option writer) keeps the premium received as profit.
Given that the stock price at expiry is INR 840, which is above the strike price of INR 800, the put option will not be exercised.
Thus, the answer is correct.