Respuesta :
The net loss -$ 1306 on the investment if price underlying stock is $40.30 per share
Evaluating the profit or loss :
- Since I wrote the call option, if the call option buyer wants to buy the stock from me, I am obligated to sell the stock.
- The exercise price is $37.50 and the underlying share price is $40.30 per share.
Since the brand price is higher than the strike price, a buyer can definitely come to buy stock from me at the strike price ($37.50) and profit by selling it at the market price ($40.30) in the market where it was sold. .
- In this case, if you decide not to sell to the buyer, you must pay the call option buyer the difference between (market price and strike price).
- However, as the option seller, I receive a call price of $1.1 from the option buyer.
Therefore, the net loss from this trade is $13.6. See below for calculations.
Strike Price 37.50
Market Price 40.30
Difference (Loss Per Contract) -2.80
Total Loss (Difference in
(Market Price & Strike Price)* Total No of Contract)…
i.e. (2.80×8) -22.40
Call Price to be Received by Me
(Call Price per contract * No of Contract Wrote)…
i.e. (1.1×8) 8.8
Net Loss -13.60
Learn more about price of shares :
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