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?
a) greater
b) the same
c) less
Shawn owns an option. He cannot lose more than the premium.