Put option on Euros: Compute net payoff and break-even rate on euro trade.
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There is a put option on the euro with an exercise price of $0.54/euro and it expires in three months and is trading at 1.55 cents per euro. The minimum contract size is euro 32,000. What would be the net payoff to the buyer and the seller of the put if the spot price at expiration is $0.71/euro, and what is the break-even rate?
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If the spot price at expiration is $0.71/euro, there's a rise in the price of euro. therefore, the put option won't ...
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