Suppose you write 36 call option contracts with a $80 strike. The premium is $4.

Question

Suppose you write 36 call option contracts with a $80 strike. The premium is $4.33. Evaluate your potential gains and losses at option expiration for stock prices of $70, $80, and $90. (Input all amounts as positive values. Do not round intermediate calculations. Omit the "$" sign in your response.) At stock price of $70, the (Click to select)gainloss is $ At stock price of $80, the (Click to select)gainloss is $ At stock price of $90, the (Click to select)gainloss is $ References eBook & Resources

Explanation / Answer

For a call option strike price of $ 80+ Premium paid 4.33= 84.33 (Purchase price) Sale value ,if sold in mkt. at option expiration: Per contract of 100 shares For 36 contracts @ Stock Price of $ 70 70-84.33= -14.33 Potential Loss -1433 -51588 @ Stock Price of $ 80 80-84.33= -4.33 Potential Loss -433 -15588 @ Stock Price of $ 90 90-84.33= 5.67 Potential Gain 567 20412

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