Exercising a long put option results in being short in the underlying stock. To make a profit when exercising a long put, the stock price must decline below the strike price minus any premium paid for the put

Training Mode

Unit 1 Unit 2 Unit 3 Unit 4

An investor that bought a put option on a stock will make a profit when the put is exercised if

The stock price exceeds the exercise price

The stock price falls below the exercise price

The stock price falls below the exercise price plus minus the premium that was paid

The stock price exceeds the exercise price plus the premium that was paid