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You simultaneously purchase an underlying stock at $100 and write an at-the-money call (exercise price $100) on the stock. The option price is $10. What
You simultaneously purchase an underlying stock at $100 and write an at-the-money call (exercise price $100) on the stock. The option price is $10. What is the profit for your strategy if the underlying stock at expiration of the call is $85?
$10 | ||
$5 | ||
$0 | ||
$5 | ||
$10 |
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