You purchased four WXO 30 call option contracts at a quoted price of $.34. What is your net gain or loss on this investment if the price of WXO is $33.60 on the option expiration date?
A) -$1,576
B) -$136
C) $1,304
D) $1,440
E) $1,576

Question

Quizplus · Accepted Answer

The net gain is calculated as follows:Net gain = (Selling price - Purchase price) x Number of contractsSelling price = Market price of the underlying asset - Strike priceSelling price = $33.60 - $30 = $3.60Purchase price = Quoted price x Number of contractsPurchase price = $0.34 x 4 = $1.36Net gain = ($3.60 - $1.36) x 4 = $1,304

You Purchased Four WXO 30 Call Option Contracts at a Quoted