In June, Bubba bought 100 shares of XYZ at $35.

FINRA Series-7 Question Answer

In June, Bubba bought 100 shares of XYZ at $35. In November, he bought a listed put in XYZ with a $35 strike price and a July expiration for a premium of $600.

If the option expires without being exercised, how is the premium expense treated by Bubba?

as a $600 capital loss

as a $600 capital gain

$600 is added to his acquisition cost for the stock

$600 is held in abeyance until the stock is eventually sold

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In June, Bubba bought 100 shares of XYZ at $35.

The Answer Is:

Explanation:

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