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You sell a 6-month call option on one share of stock. The call has a premium...

You sell a 6-month call option on one share of stock. The call has a premium of $1.70 and a strike/exercise price of $10. The stock currently has a price of $10.75 per share. On the day that the option expires, the stock is selling for $12.58. What ends up being your net playoff on this position? Round your answer to the nearest penny.

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Answer #1

Solution As here call option is sold, hence payoff = strike price - share price, if positive then 0 PARTICULARS Payoff = 10 -

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