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A writer sells 100 call options with strike $42 for $0.91 each and deposits these premiums in a bank.The calls mature in 30 days, and
A writer sells 100 call options with strike $42 for $0.91 each and deposits these premiums in a bank.The calls mature in 30 days, and the bank's interest rate over those 30 days is 5%.At expiry the underlying asset of the call is worth $39 each. At expiry, the writer withdraws all cash from the bank, purchases the necessary amount of shares on the open market and completes the call contract.What is the writer's profit? Give your answer correct to two decimal places, and if the writer makes a loss include a minus sign.
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