Assume you are reviewing a table that lists the current stock option contracts and quotes.Which one of these statements would correctly apply to that table?
A)If you write a contract you will pay the bid price per share listed in the table.
B)If you write a contract you will receive the difference between the bid and ask prices per share.
C)The bid price on a specific contract will be higher than the ask price on that same contract.
D)To purchase one contract you must pay 1000 times the quoted bid price shown in the table.
E)To purchase one contract you must pay 100 times the quoted ask price shown in the table.

Question

Quizplus · Accepted Answer

When purchasing an options contract, you pay the ask price per share, and since each standard contract represents 100 shares, you must pay 100 times the quoted ask price for one contract.

Assume You Are Reviewing a Table That Lists the Current