Question

You purchase one MMM July 129 call contract (equaling 100 shares) for a premium of $21. You hold the option until the expiration date, when MMM stock sells for $141 per share. You will realize a ______ on the investment.

Answer 1

There is loss of $900 on investment.

Step-by-step explanation:

The purchase of 1 MMM July 129 call contract at premium = $21

Since it is given that it is held unit the expiration date.

The selling price of MMM stock = $141 per share.

Total number of shares = 100

Total amount paid for share (purchase price) = 129 + 21 = $150

Loss or profit = Market price on expiration date- purchase price

=141-150

= - 9

Total loss = 9 × 100

=900 loss