You own 100 shares originally purchased for $33.11 each. To gain additional income you sold calls on
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Question:
You own 100 shares originally purchased for $33.11 each. To gain additional income you sold calls on the shares for $3.10 per share with a strike price of $34.00 (given that the market price of each share at maturity is $39.93)
a)Calculate the net profit realised from the share and option holding at maturity. Give your answer in dollars to the nearest dollar.
Net profit realised = $
b)Calculate the net profit realised had the call options not been bought. Give your answer in dollars to the nearest dollar.
Net profit realised without call options = $
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