Pnl and stk price

[clarodina]

Have a question about the profit and loss and stk price

Assume a trader sold a otm put on stk abc ($23) initially and the otm gets into itm with price decreases to $21. the itm put is close for a loss of -1.30 and next month itm put 23 is sold at 1.50. At expiry the itm put is assigned. What is the cost price of the assigned stk? And what the profit and loss?

 

[SIUYA]

Have a question about the profit and loss and stk price

Assume a trader sold a otm put on stk abc ($23) initially and the otm gets into itm with price decreases to $21. the itm put is close for a loss of -1.30 and next month itm put 23 is sold at 1.50. At expiry the itm put is assigned. What is the cost price of the assigned stk? And what the profit and loss?

The total cost of any assigned option is the strike price less any money received for selling the option.
In this case you seem to be confusing/cross-reference stock price and strike in your explanation.....(???)

the total cost for the stock is $23 --- the strike
the PL to date is lost $1.30 received $1.50 -- net received $.20

If you sold the $23 put for $1.50 and it was assigned - you effectively paid $21.50 - (cost=$23, less $1.5 received for the option) for the stock. This month.
Add that you lost $1.30 the month before and your total entry cost for ALL the trades is $21.50 + 1.30 = $22.8


As to what your PL is - that depends on what the share price is now.

simple accounting depending on where you wish to assign option premium to.

(Remember to inverse for calls and shorts)