What is the option buyer's total profit or loss per share if a call option is purchased for a $5 premium, has a $50 exercise price, and the stock is valued at $53 at expiration?
A)($5)
B)($2)
C)$3
D)$8 Value of call option = stock price - exercise price
Total profit of call = value of call option - premium paid
Then:
Value of call option = $53 - 50 = $3

Question

Quizplus · Accepted Answer

The total profit or loss per share is calculated as the value of the call option ($3) minus the premium paid ($5), resulting in a loss of $2 per share.

What Is the Option Buyer's Total Profit or Loss Per