Suppose you buy three June PHLX euro call options with a 90 strike price at a price of 2 3 ( ) a What would be your total dollar cost for these calls, ignoring broker fees b After holding these calls for 60 days, you sell them for 3 8 ( ) What is your net profit on the contracts, assuming that brok...

a With each call option being for 62500 the three contracts combined are for 187500 At ...

Suppose you buy three June PHLX euro call options with a 90 strike price at a price

Question:

Suppose you buy three June PHLX euro call options with a 90 at a price of 2.3 (¢/€).
a. What would be your total dollar cost for these calls, ignoring fees?
b. After holding these calls for 60 days, you sell them for 3.8 (¢/€). What is your net profit on the contracts, assuming that brokerage fees on both entry and exit were $5 per contract and that your was 8% per annum on the money tied up in the premium?

Strike Price
In finance, the strike price of an option is the fixed price at which the owner of the option can buy, or sell, the underlying security or commodity. Broker
A broker is someone or something that acts as an intermediary third party, managing transactions between two other entities. A broker is a person or company authorized to buy and sell stocks or other investments. They are the ones responsible for... Opportunity Cost
Opportunity cost is the profit lost when one alternative is selected over another. The Opportunity Cost refers to the expected returns from the second best alternative use of resources that are foregone due to the scarcity of resources such as land,...