A "Put" Option Example

Posted by Brendan Flaherty, CFP®, CIMA®

Jun 3, 2016 10:49:41 AM

Assume that a stock is currently selling for FMV of $50, and you purchase a put for $2 with a $40 exercise price that expires in three months.

  1. If the stock does not move from the $50 FMV, the purchaser of the put will have lost $2.
  2. The break-even for the purchase of the put is $38 ($40 exercise price – $2 put option cost).
  3. A dollar-for-dollar gain is received when the price is less than the $38 break-even point.
  4. If at expiration the stock is at $25, the net gain is $13 ($40 exercise price – $2 cost of put option – $25 current FMV of the stock).

Topics: Course 3: Investment Planning

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Last updated: December 28, 2023

This Privacy Policy describes Our policies and procedures on the collection, use and disclosure of Your information when You use the Service and tells You about Your privacy rights and how the law protects You.

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Interpretation and Definitions

Interpretation

The words of which the initial letter is capitalized have meanings defined under the following conditions. The following definitions shall have the same meaning regardless of whether they appear in singular or in plural.

Definitions

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Types of Data Collected

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Disclosure of Your Personal Data

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If the Company is involved in a merger, acquisition or asset sale, Your Personal Data may be transferred. We will provide notice before Your Personal Data is transferred and becomes subject to a different Privacy Policy.

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Other legal requirements

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Our Service does not address anyone under the age of 13. We do not knowingly collect personally identifiable information from anyone under the age of 13. If You are a parent or guardian and You are aware that Your child has provided Us with Personal Data, please contact Us. If We become aware that We have collected Personal Data from anyone under the age of 13 without verification of parental consent, We take steps to remove that information from Our servers.

If We need to rely on consent as a legal basis for processing Your information and Your country requires consent from a parent, We may require Your parent's consent before We collect and use that information.

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We have no control over and assume no responsibility for the content, privacy policies or practices of any third party sites or services.

Changes to this Privacy Policy

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We will let You know via email and/or a prominent notice on Our Service, prior to the change becoming effective and update the "Last updated" date at the top of this Privacy Policy.

You are advised to review this Privacy Policy periodically for any changes. Changes to this Privacy Policy are effective when they are posted on this page.

Contact Us

If you have any questions about this Privacy Policy, You can contact us:

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Refund Policy

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We are confident that you will be satisfied with your learning experience. However, if you need to cancel your online course enrollment for any reason, we grant refunds within the first 15 days of purchase. The 15 day refund period begins on the date of your initial purchase.

Subsequent enrollments in courses of the same certification are not refundable. Re-enrollments, extensions and continuation packages are not refundable. The first payment of a payment plan is refundable if you are within 15 days, but subsequent payments are not refundable.

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