Question: Consider Citigroup ( C ) stock priced at $ 6 2 . There are put and call options available at exercise prices of $ 6

Consider Citigroup (C) stock priced at $62. There are put and call options available at exercise prices of $66 and a time to expiration of six months. The calls are priced at $5.20 and the puts cost $5.15. There are no dividends on the stock and the options are European. This transaction consists of 100 shares or one contract (100 options).
What is your profit if you construct a covered call (i.e. write a call against a stock you own) and the stock ends up at $73?


  

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!