Tarun purchases the following European Call options of TCS. He also purchases the following European put option of ACC. What decision he would take on expiry if TCS closes at ₹ 835 and ACC closes at ₹ 565, spot prices? I

Tarun has purchased a European put option for ACC with a strike price of ₹520. At expiry, the spot price of ACC is ₹565. A put option gives the holder the right to sell the underlying asset at the strike price. Tarun would not exercise this put option because the spot price (₹565) is greater than the strike price (₹520). He can sell ACC shares in the open market at ₹565, which is higher than the strike price of ₹520. Exercising the put option would mean selling at a lower price than the market offers. Decision: Do not exercise the ACC 520 Put option.