Question
Options strategies and profits at expiration Buying A call Profit Table St<X St>x T=0 -C0 -C0...
Options strategies and profits at expiration
|
Buying A call |
||
|
Profit Table |
St<X |
St>x |
|
T=0 |
-C0 |
-C0 |
|
T=t |
0 |
St-X |
|
Profit |
-C0 |
-C+St-X |
|
Breakeven |
St=x+C0 |
Exercise Price at $80
Stock Price $60 $70 $80 $90 $100
Option value 0 0 0 10 20
How can I find the profit from this question and draw profit and lose graph?
Homework Answers
Answer #1
Value of a long call option = max(St - X, 0)
Profit of a long call option = max(St - X, 0) - Premium paid
X = 80
Let's say the premium paid for this call is $4
C = $4
Screenshot with formulas
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