Clark buys a monthly 100 MW on-peak power call option for a month that has 20 business
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Clark buys a monthly 100 MW on-peak power call option for a month that has 20 business days4. The strike price is USD 70/MWh and the premium is USD 5/MWh. Clark exercises the call option in a month when the average on-peak price is USD 80/MWh. What is the gross settlement amount for Clark?
a. USD 320,000
b. USD 160,000
c. USD 240,000
d. USD 480,000
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