A trader got into an simple call option contract(OTC) with a farmer to purchase his tomato crop
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Question:
A trader got into an simple call option contract(OTC) with a farmer to purchase his tomato crop @ the strike price of Rs.10000/ton to be delivered after 4 months and agrees to pay the premium of 5%/ton. The farmer produces an average of 70tons tomatoes' in his 10 acres land.
Calculate the business options for the trader whether to execute the call option in the pricing scenarios of tomatoes in the market and the profit/loss in each scenario.
Related Book For
Financial Reporting And Analysis
ISBN: 9781260247848
8th Edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer
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