Course Name: Options Trading Strategies In Python: Basic, Section No: 1, Unit No: 7, Unit type: Quiz
here the loss should be of 10 rs as the end price has increased to 840 rs which is above the strike price
According to the question, a trader writes a put option on the Reliance at the strike price of INR 840. At expiry, Reliance is trading at INR 840. This means that the put option expires out of the money. A put option is out of the money when the current market price of the underlying security is above the strike price.
Since the put option expires worthless, the put writer will earn the premium that is INR 30 as given in the question.