You Sold One Call Option Contract with a Strike Price

question 3

Multiple Choice

You sold one call option contract with a strike price of $55 when the option was quoted at $0.80.The option expires today when the value of the underlying stock is $53.70.Ignoring trading costs and taxes,what is the net profit or loss on this investment?

• A)-$250
• B)-$80
• C)$0
• D)$50
• E)$80

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Definitions:

"Discovery"

Often refers to the European "discovery" of lands outside of Europe, although these lands were already inhabited, marking the beginning of colonization.

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A continuous range of high mountains along the western coast of South America, extending over 7,000 km and including many of Earth’s highest peaks.

Complex System

A system composed of interconnected parts that as a whole exhibit one or more properties not obvious from the properties of the individual parts.