Fred wrote a naked call option on Mitrosoft stock. When written the call had a premium of $6, an expiration of one month, an exercise price of $40, and the stock was selling at $36. At expiration, Mitrosoft was selling at $43. What profit/loss did Fred earn? Assume the option was for one share of stock.

Question

Fred wrote a naked call option on Mitrosoft stock. When written the call had a premium of $6, an expiration of one month, an exercise price of $40, and the stock was selling at $36. At expiration, Mitrosoft was selling at $43. What profit/loss did Fred earn? Assume the option was for one share of stock.

Quizplus · Accepted Answer

The Answer of Fred wrote a naked call option on Mitrosoft stock. When written the call had a premium of $6, an expiration of one month, an exercise price of $40, and the stock was selling at $36. At expiration, Mitrosoft was selling at $43. What profit/loss did Fred earn? Assume the option was for one share of stock.

Fred Wrote a Naked Call Option on Mitrosoft Stock