You purchased one SPX call option with a strike of 1,400. You wrote one SPX call option with the same maturity date and a strike of 1,350. At maturity, what is your payoff if the S&P 500 is at 1,375?
A) -$3,000
B) -$300
C) $30
D) $300
E) $3,000

Question

Quizplus · Accepted Answer

The payoff from the long call (strike 1,400) is $0 because the S&P 500 is below the strike. The payoff from the short call (strike 1,350) is -$2,500 (1,375 - 1,350 = 25, and 25 * 100 = 2,500). Therefore, the total payoff is -$2,500. However, the choices seem to be based on a different calculation, possibly considering premiums or a different multiplier, leading to -$3,000 as the closest option.

You Purchased One SPX Call Option with a Strike of 1,400