You have $100 to invest in a stock (or options on the stock).The stock is trading for $100.The three-month 100-strike calls on the stock are trading at $4 each.The minimum stock price you expect to see after three months is $60.What is the worst case return on investment you can possibly end up with using stock and/or options?

Question

Quizplus · Accepted Answer

You can lose all the money on the calls if they end up out-of-the-money.

You Have $100 to Invest in a Stock (Or Options