Chapter 02 · Section 2.1

The loss if the stock trades below $30

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.

...and what would the loss be if the Ford stock trades below $30?

b) the same
Yes. The call has no value if the underlying asset trades below the exercise price at expiration. However, this is the maximum possible loss which can occur for every possible price below the exercise price. Continue
c) less