Suppose you buy a June expiration call option on 30 shares of Apple stock with the...
Suppose you buy a June expiration call option on 30 shares of Apple stock with the exercise price of $240. If the stock price is $256 in June (just before expiration) – would you exercise this option?
| A. |
Yes |
|
| B. |
No |
|
| C. |
Impossible to determine |
|
| D. |
You would have to wait until after the expiration date |
Homework Answers
The profit in case of a call option is computed as shown below:
= Stock price - exercise price - premium paid
The profit in this case is computed as follows:
= $ 256 - $ 240 - $ 0
= $ 16 per share.
So the correct answer will be option A. i.e. Yes.
Feel free to ask in case of any query relating to this question
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