Series 7 - General Securities Representative Exam
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A trader sold a 50 put in a stock that was trading at $55. Time passed and the stock price was $48 at option expiration. What happens to the trader's put?
It is assigned
A
It expires worthless
B
It results in a net profit of $200
C
It results in a net loss of $500
D
Explanations
The put expired in the money. Since he wrote the put, the put would be assigned and would result in 100 long shares of stock at $50 per share