Steve owns an option which grants him the right to purchase shares of Lokier Tool stock at a price of $45 a share.Currently,the stock is selling for $52.40 a share.Steve would like to realize his profits but is not permitted to exercise the option for another two weeks.Which one of the following does Steve own?

Question

Quizplus · Accepted Answer

Steve owns a European call option, which gives him the right to buy shares at a specific price ($45) but only allows him to exercise this option at a specific date in the future, not before.

Steve Owns an Option Which Grants Him the Right to Purchase