On May 3, 2016, as indicated in Table 1.2, the spot offer price of Google stock is

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On May 3, 2016, as indicated in Table 1.2, the spot offer price of Google stock is $696.25 and the offer price of a call option with a strike price of $700 and a maturity date of September is $39.20. A trader is considering two alternatives: buy 100 shares of the stock and buy 100 September call options. For each alternative, what is
(a) The upfront cost,
(b) The total gain if the stock price in September is $800,
(c) The total loss if the stock price in September is $600. Assume that the option is not exercised before September and if stock is purchased it is sold in September.
Strike Price
In finance, the strike price of an option is the fixed price at which the owner of the option can buy, or sell, the underlying security or commodity.
Maturity
Maturity is the date on which the life of a transaction or financial instrument ends, after which it must either be renewed, or it will cease to exist. The term is commonly used for deposits, foreign exchange spot, and forward transactions, interest...
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