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A covered call is construction using a particular futures contract and options on the futures contract. Each futures contract controls 5000 units of the spot
A covered call is construction using a particular futures contract and options on the futures contract. Each futures contract controls 5000 units of the spot asset. Each option contract controls one futures contract.
The call option has exercise price of 150 per unit, and is sold at 6.75 per unit. If the futures price when the covered call is initiated is 155 per unit, and the future price at the expiration of the option is 152, find the total profit per contract at expiry.
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