You purchase 20 call option contracts with a strike price of $110 and a premium

Question

You purchase 20 call option contracts with a strike price of $110 and a premium of $1.85. Assume the stock price at expiration is $119.12.

What is your dollar profit? (Do not round intermediate calculations. Omit the "$" sign in your response.)

What if the stock price is $105.07? (Negative amount should be indicated by a minus sign. Do not round intermediate calculations. Omit the "$" sign in your response.)

You purchase 20 call option contracts with a strike price of $110 and a premium of $1.85. Assume the stock price at expiration is $119.12.

Explanation / Answer

Ans

Ans 1 Call strike Price    110.00 Stock price at exercise date    119.12        9.12 Less Call margin per contract        1.85 Net Gain per Contract        7.27 Dollar profit=No of contract * Net Gain per Contract 20*7.27    145.40 Ans 2 Call strike Price    110.00 Stock price at exercise date    105.07 Call will not be exrcised since option is not in the money           -   Less Call margin per contract        1.85 Net Gain(Loss) per Contract      -1.85 Dollar profit=No of contract * Net Loss per Contract

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