Which one of the following is correct for the owner of a June call, valued at $3, on XYZ Corp. with a strike price of $60? XYZ Corp. currently trades at $55.
A) XYZ stock will go to $63 per share within the option period.
B) The option should be exercised now.
C) The option owner's current profit is $3 per share.
D)The option may expire without value.

Question

Quizplus · Accepted Answer

If XYZ Corp. continues to trade at $55 per share or lower, the option will expire worthless. Therefore, D is the best choice.

Which One of the Following Is Correct for the Owner