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4. Introduction to option pricing models A call option gives its owners the right, but not the obligation, to: sell a specified number of shares
4. Introduction to option pricing models A call option gives its owners the right, but not the obligation, to: sell a specified number of shares at a certain price within a specified period of time. buy a specified number of shares at a certain price within a specified period of time. buy a commodity at a specified price and future date, at which physical delivery occurs. sell a commodity at a specified price and future date, but physical delivery does not occur. A call option on a single share of Triptych Food Corp.'s common stock has a market price of $9.76 and expires in six months. The option has an exercise, or strike, price of $82.00, and the current stock price is $89.71. Select the correct exercise value and option premium for this call option in the following table: Exercise Value Option Premium Suppose the stock's price fell to $80.11 and the option's market price fell to $3.01. Indicate the option's new exercise value and the new value of the option premium in the following table: New Exercise Value New Option Premium
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