You sell a put option on S&P 500 index with the strike price of 3300. Suppose the S&P 500 index is 3000 on the option expiration date. What is your payoff?

300

Explanation:

Given that,

Strike price of selling a put option on S&P 500 index = 3,300

S&P 500 index on option expiration date = 3,000

Put option is defined as the right but not the obligation of the holder to sell the specified asset at a specified price at a future date. The option is exercised if the strike price of the option is higher than the price at a expiration date.

Therefore, the payoff is as follows:

= Strike price - Market price

= 3,300 - 3,000

= 300