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nadezda [96]
3 years ago
15

You purchased six call option contracts on ABC stock with a strike price of $32.50 when the option was quoted at $1.65. The opti

on expires today when the value of ABC stock is $34.60. Ignoring trading costs and taxes, what is the net profit or loss on this investment
Business
1 answer:
snow_lady [41]3 years ago
4 0

Answer:

$270

Explanation:

Calculation to determine the net profit or loss on this investment

Using this formula

Total profit/Loss =Stock value -Strike price-Option quoted)×100×Call option

Let plug in the formula

Total profit = ($34.60 - $32.50 - $1.65) × 100 × 6

Total profit =$0.45×100×6

Total profit= $270

Therefore the net profit on this investment is $270

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