Explanation : Since Mr. Ahmed has written a put contract, he is short the option and
has an obligation to purchase the asset if exercised by the put owner. He
also has a long exposure to the risk of the underlying index future
because he benefits when its quoted price increases—that is, when the
put declines in value (or suffers a loss when its quoted price decreases as
the put increases in value).
Explanation : Option contracts are executed at the strike price and can therefore be
viewed as limit orders. In this case, a put buy order at a strike price of
$40 will guarantee selling the stock at $40.