A call option on a stock, with time to maturity of 2 months and strike price of $24.39, is currently trading at a premiu...
A call option on a stock, with time to maturity of 2 months and strike price of $24.39, is currently trading at a premium of $1.85 per share. If you buy options on 20,000 shares (200 contracts), and then at maturity the stock is trading at $22.78, what is your net profit from this position?
Homework Answers
Call option Strike price = $24.39
Current price = $22.78
So, On expiry date, Option to buy @ $24.39 when the market price is $22.78, Option will be lapsed.
So, Total cost will be the premium paid which is $1.85 per share.
Total Loss from the position is $1.85 * 20,000 = $37,000
So, Net loss from the position = $37,000
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A call option on a stock, with time to maturity of 2 months and strike price of $24.39, is currently trading at a premiu...
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Correct answer provided. Need steps on how to get there.
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Correct answer provided. Need steps on how to get there.
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Question 7:
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