Question: 1. An investor with no other positions sells 1 ABC Jan 45 call at 2.50. If the option expires when the stock is trading at 44.50, what is the investor's profit or loss? Please show all work.
2. A customer buys 1 ABC Jan 60 put at 6 and writes 1 ABC Jan 75 put at 13. Calculate the maximum loss? Please show all work.
3. Your customer buys 100 shares of TIP stock at 59 and sells a TIP 60 call at 4. The stock's price rises to 70 and the option is exercised. For tax purposes, the customer must report sales proceeds of: Please show all work.
A. $6,400 and cost basis of $5,900
B. $6,000 and cost basis of $5,500
C. $7,000 and cost basis of $5,900
D. $7,000 and cost basis of $6,500