Question

A trader writes a December put option with a strike price of $$\$ 30$$. The price of the option is $$\$ 4$$. Under what circumstances does the trader make a gain? 

   A trader writes a December put option with a strike price of $$\$ 30$$. The price of the option is $$\$ 4$$. Under what circumstances does the trader make a gain?
Options, Futures, and Other Derivatives
Options, Futures, and Other Derivatives
John C. Hull 10th Edition
Chapter 1, Problem 16 ↓

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The trader has written (sold) a put option, which means they have the obligation to buy the underlying asset at the strike price of $30 if the option is exercised by the buyer.  Show more…

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A trader writes a December put option with a strike price of $$\$ 30$$. The price of the option is $$\$ 4$$. Under what circumstances does the trader make a gain?
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