A non-dividend paying stock, Tikon, is trading at $200 today. There is a put option on this security with a strike price of $200 that expires on Dec 19, 2021 and the current price of this put option is $20. Assume that you buy one contract of the put option and 100 shares of Tikon on this date and hold your positions till Dec 19, 2021.
1. Assume that the stock price closes at $175 on Dec 19, 2021. What is your total profit or loss from your investment in these securities?
2. Assume that the stock price closes at $250 on Dec 19, 2021. What is your total profit or loss from your investment in these securities?
