Richie owns 100 shares of General Electric (GE). Richie has owned the stock for 10 years. GE is currently trading at $24.00 per share. Richie wants a little extra money, so he writes (sells) a call option on GE with a strike price of $24.00. Richie charges a premium of $1.00. He assumes that GE shares drop to $18.00 per share at the end of the expiration period. 

How much did Richie make or lose on this transaction (total)?

Answer rating: 100% (QA)

Solution In this case Riche sells one call option with a ... View the full answer