Question
A trader buys a 3-month call option contract on 100 shares of a stock with strike price $40. Which of the following statement is correct
A trader buys a 3-month call option contract on 100 shares of a stock with strike price $40. Which of the following statement is correct if the options are held until the end?
A. If the stock price is $42 at the end, the trader exercises his options
B. If the stock price is $38 at the end, the trader exercises his options
C. The trader has to buy 100 shares of the stock in the end no matter what happens
D. The trader has to sell 100 shares of the stock in the end no matter what happens
A trader buys a 6-month put option contract on 100 shares of a stock with strike price $40. Which of the following statement is correct if the options are held until the end?
A. If the stock price is $42 at the end, the trader exercises his options
B. If the stock price is $38 at the end, the trader exercises his options
C. The trader has to buy 100 shares of the stock in the end no matter what happens
D. The trader has to sell 100 shares of the stock in the end no matter what happens
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The Practical Guide To Wall Street Equities And Derivatives
Authors: Matthew Tagliani
1st Edition
0470383720, 978-0470383728
