Case Study:

A trader got into an simple call option contract(OTC) with a farmer to purchase his tomato crop @ the strike price of Rs.10000/ton to be delivered after 4 months and agrees to pay the premium of 5%/ton. The farmer produces an average of 70tons tomatoes in his 10 acres land.

Calculate the business options for the trader whether to execute the call option in the following pricing scenarios of tomatoes in the market and show the profit/loss in each scenario.

Case 1 10/KG Case 2 12/KG Case 3 15/KG Case 4 7/KG Case 5 20/KG