Final answer:
The option expires out-of-the-money as the underlying stock price is below the strike price, so the call option writer keeps the full premium received, which is $80, making it the net profit from selling the option.
Step-by-step explanation:
The correct option : e
The student's question falls within the realm of options trading, which is an advanced financial concept typically encountered in college-level business courses. The correct direct answer to the question is E. $80.
As the option writer, if the stock price at expiration is below the strike price, the option is out-of-the-money and will not be exercised by the option buyer. The writer then keeps the entire premium, which is the initial credit received when selling the option. In this case, one option contract represents 100 shares, and the option was sold at $0.80 per share. Therefore, the total premium collected is 100 shares × $0.80/share = $80. Since the stock price is below the strike price and the option expires today, it will expire worthless, allowing the seller to keep the entire premium as profit, resulting in a net gain of $80.