Suppose you have $10000 for investments. Monster Beverage Corporation is selling at $50 per share.
1) If monster is selling for $55 per share 3 months later, what is your gain/loss?
2) If Monster is selling for $45 per share 3 months later what is your gain/loss?
Let's suppose you decide to invest your $10000 on the option market. A call option on Monster Beverage Corporation with a $50 strike price and 3 months to maturity is also available at a premium of $4.
3) If monster is selling for $55 per share 3 months later, what is your gain/loss?
4) If Monster is selling for $45 per share 3 months later what is your gain/loss?