Chapter 02 · Section 2.1

Profit or loss on a per share basis

Shawn is the holder of a call option, i.e. he is long a call option. It is a Ford Dec 30 call and the premium he paid was $ 2 per share. At expiration in December Ford shares trade at $ 30. What is the profit or loss on a per share basis?

a) 2
• b) 0
  No. The cashflow is not equal on the earnings and the expenditures.
  c) 200
  d) -200
  e) -2
  f) -20

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