lc26mizzou

I’m thinking b) -400.  She lost $800 in the value of the underlying stock ($60 at P0, $52 today), but then made that value back via the option, netting zero.  After accounting for the premium of $4, she ends up losing $400?

lc26mizzou

so here what threw me off….
because she has a put option, she has the obligation of selling her 100 shares at $60 each for a total of $6000 when the price drop down to $52/shs. She can use the $6000 she gets for exercising her option to buy back shares at the lower price today, which is $52/shs….for a total of $5200 and therefore netting a gain of $800 ($6000 received - $5200 paid for new shares = $800)….after paying off the $400 ($4/per put option premium) she should have a total profit of $400?