Discover a wealth of knowledge and get your questions answered at IDNLearn.com. Our experts are ready to provide prompt and detailed answers to any questions you may have.
Sagot :
$2 is the current payoff value of this option.
First calculate the price of the option contract: 100 shares x $1 = $100. The security price is now above breakeven, so the call option is "in the money". This is because the investor makes a profit by buying $60 per share at a strike price of only $55 per share.
The idea behind a call option is that if the current stock price exceeds the strike price, the option holder can sell the stock for a profit. You can calculate your profit by subtracting the strike price and the cost of the call option from the current market price of the underlying asset.
Buying a $5 put option gives you the right to sell 100 shares at $100 per share. If ABC Company's stock price drops to $80, he exercises his option to sell 100 shares at $100 per share, for a total profit of $1,500.
Learn more about stock prices here https://brainly.com/question/1166179
#SPJ4
We greatly appreciate every question and answer you provide. Keep engaging and finding the best solutions. This community is the perfect place to learn and grow together. Find precise solutions at IDNLearn.com. Thank you for trusting us with your queries, and we hope to see you again.
