The optimum strike price for a put option on Applied Graphene Materials (AGM) for August 16th expiration with the highest profit potential cannot be determined without additional information, such as the current market price of AGM and the investor's risk tolerance.
- Current Market Price: The current market price of AGM is 1p.
- Strike Price Selection: The strike price should be set below the current market price to provide a profit opportunity if the stock price declines. For example, if the current market price is 1p, a strike price of 0.8p or lower could be considered to provide a higher potential for profit if the stock price drops.
- Risk Tolerance: The strike price should also consider the investor's risk tolerance. A higher strike price reduces the risk of loss but also reduces the potential profit if the stock price declines significantly.
To determine the optimum strike price for the highest profit potential, an options profit calculator should be used, taking into account the current market price, the desired risk-reward profile, and the expiration date of August 16th. This will help identify the optimal strike price to maximize profit potential, considering the trade-off between risk and reward.