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A call option with a strike price of 55$ can be bought fo $4 what will be your net profit if you sell the call
A call option with a strike price of 55$ can be bought fo $4 what will be your net profit if you sell the call and the stock price is 52$ when the call expires?
I know the answer will be 4$ but i dont know how did it get there. I know that a call option will lose its market value depreciates so it would not benefit the call buyer. however if the market price appreciates then it would be profitable for the buyer as he is going to buy it at a "discounted price". please if somebody can clear this for me as i'm pretty confused. thanks
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