When ABC stock trades at $40 its July 50 calls trade at $3. What will be...
When ABC stock trades at $40 its July 50 calls trade at $3. What will be the value of these options at expiration if the stock price at expiration is $40? $50? $75?
Homework Answers
rate positively ..
| Value of the call at expiry = Max of (spot price - strike price, 0) | ||
| Stock price | Value of option | |
| 40 | 0 | Max of (40-50,0) |
| 50 | 0 | Max of (50-50,0) |
| 75 | 25 | Max of (75-50,0) |
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When ABC stock trades at $40 its July 50 calls trade at $3. What
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