or giving someone else the right to buy the stock. The investor collects the option premium and hopes the option expires worthless (below strike price). This strategy generates additional income for the investor but can
Inoption terminology, what the word means is the relationship between an option'sstrike priceand the underlying stock'scurrent share price. Specifically, a covered call can be: In the Money- the strike price islowerthan the current share price At the Money- the strike price is roughly thesame...
Of course, once you exercise the options, you have to pay for the stock at the strike price—$50 in this case. But you would do so only if the stock price had risen high enough for the option to bein the money—a term that implies an option is worth exercising because the stock pr...
A call option priced at $2 with a current stock price of $30 in the market and an exercise price of $35 would be worth (you don't own the stock)? a. $2 b. $32 c. $3 d. -$2 e. $35 A stock with a current market...
Ideally, you want the stock to finish at or below the call strike at expiration. If the stock price settles above the strike price, you'd likely have your stock called away at the short call strike. You'd keep your original credit from the sale of the call as well as any gain in ...
option, or giving someone else the right to buy your stock. The investor collects the option premium and hopes the option expires worthless (below strike price). This strategy generates additional income for the investor but can also limit profit potential if the underlying stock price rises ...
If the stock price is below the strike price at expiration, then the call is “out of the money” and expires worthless. The call seller keeps any premium received for the option.Because of the risk that an option can become worthless, financial advisors generally advise investors to avoid ...
However, if the price drops below the strike price, the option holders lose the premium paid. For example, let us assume that the stock’sstrike priceis Rs. 5000 and the premium is Rs. 35. It is anticipated that its price will increase in the following month. As the holder of a cal...
Consider a call option with a strike price of $32. If the stock price at expiration is $41, the value of the call option is:A. $9.B. $0.C. $41. 正确答案:A 分享到: 答案解析: The call has a $9 ($41 − $32) value at expiration, because the holder of the call can ex...
1A European stock index call option has a strike price of 1,160 and a time to expiration of 0.25 years. Given a risk-free rate of 4 percent, if the underlying index is trading at 1,200 and has a multiplier of 1, then the lower bound forthe option price is closest to:[单选题...