Question
At date t, a speculator writes 3 identical European call option contracts on a stock. The size of each contract is 100 shares and the
At date t, a speculator writes 3 identical European call option contracts on a stock. The size of each contract is 100 shares and the exercise price is $45 per share. At the expiration date, which is date T, the stock price is $53.15 per share. If all 3 contracts are exercised at date T, what is the speculator obligated to do?
buy 300 shares of stock and pay $13,500
deliver 300 shares of stock and receive $13,500 in cash
deliver 300 share of stock and receive $15,945 in cash
sell 300 shares of stock and pay $13,500
Buy 3 offsetting put option contracts
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