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Assume that you have shorted a call option on Intuit stock with a strike price of $34. The option will expire in exactly three months'
Assume that you have shorted a call option on Intuit stock with a strike price of $34. The option will expire in exactly three months' time.
a. If the stock is trading at $40 in three months, what will you owe?
b. If the stock is trading at $22 in three months, what will you owe?
c. Draw a payoff diagram showing the amount you owe at expiration as a function of the stock price at expiration.
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