You Purchased 3 Call Option Contracts with a Strike Price

question 98

Multiple Choice

You purchased 3 call option contracts with a strike price of $35 and a premium of $1.20. At expiration, the stock was selling for $37.20 a share. What is your total profit or loss?

• A) - $360
• B) - $300
• C) $300
• D) $360
• E) $420

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Definitions:

Premium

The amount by which the price of a bond or security exceeds its face value or the cost associated with an options contract.

MBI Stock

Likely refers to the stock of a specific company identified by the acronym MBI, requiring specific context to accurately define financial or market attributes.

Call Option

A fiscal arrangement offering the buyer the freedom, yet not the compulsion, to buy various assets like stocks, bonds, or commodities at a fixed price before the expiration of a certain period.

Strike Price

The set price at which an option contract can be bought or sold when it is exercised.