A currency speculator writes a put option with a strike of $1.0700/SF on a notional...
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Finance
A currency speculator writes a put option with a strike of $1.0700/SF on a notional amount of SF 1 million. The premium is $0.02/SF. At the expiry, the SF appreciates to $1.0825/SF. Which is the most appropriate statement of the following?
A. The option expires OTM and the speculators loss is the premium of $20,000.
B. The option is ITM and the writer receives a net profit of $20,000.
C. The option expires OTM and the writers profit is the amount of premium of $20,000.
D. The option expires OTM and the writers net profit is $105,000
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