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An investor buys stock for $1 million on July 23, 2017 and on the same...

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Accounting

An investor buys stock for $1 million on July 23, 2017 and on the same day buys a put on the same stock with a strike price of $1 million for $150,000. On December 15, when the stock is worth $1,100,000 the investor sells the put for $25,000. On December 31, the fair market value of the stock is $1,070,000. The put and the stock constitute a straddle.

How much loss was realized on the sale of the put?

How much loss can be recognized?

What is the holding period of the stock on Dec. 31, 2017?

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