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An investor buys 100 shares of ABC at $50 per share and also sells 1 ABC April 45 call for 8. In the event that the investor is assigned an exercise notice and ABC is at 60, the trader's gain or loss on
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An investor buys 100 shares of ABC at $50 per share and also sells 1 ABC April 45 call for 8. In the event that the investor is assigned an exercise notice and ABC is at 60, the trader's gain or loss on a per share basis would be:(A)$3 profit(B)$3 loss(C)$13 profit(D)$13 loss

User Sthede
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1 Answer

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Answer:

(A)$3 profit

Step-by-step explanation:

The investor sale at $8 per share the right to acquire shares for $45

When the share is being traded at $60 it is exercise thus:

the call premium was $8

We purchase the sale at $50 and sale it at $45

loss on sale for $5 per share

Total result: 8 - 5 = 3

User Avram Tudor
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